PA Environment Digest Blog: Data Center Stampede Trampling PA Ratepayers Part I: PA Utility Law Project - Utility Terminations Up 30% Already; Prioritize Existing Loads; Centers Need To Help Pay For Utility Assistance

On October 22, the House Energy Committee held a hearing on the impacts of the rush to develop A.I. data centers on the electric grid and ratepayers in Pennsylvania and House Bill 1824 (Matzie-D-Beaver).

Rep. Elizabeth Fiedler (D-Philadelphia) serves as Majority Chair, and Rep. Martin Causer (R-Cameron) serves as Minority Chair.

Part of the agenda featured the independent PJM Market Monitor, the PA Office of Consumer Advocate and the PA Utility Law Project.

These witnesses offered their comments on how A.I. data centers have already caused a $16.6 billion surge in electric prices paid by ratepayers in the PJM service area and outlined the adverse consequences of not taking effective action to protect ratepayers as part of data center development.

They also offered remarkably similar solutions--

-- Require data centers to bring their own generation - PJM Market Monitor, PA Consumer Advocate, PA Utility Law Project

-- Authorize the PUC to set conditions for allowing centers to be served by the grid - PA Consumer Advocate, PA Utility Law Project

-- Require center contributions to Universal Service Assistance Programs and LIHEPA to reduce the impact of electricity prices increases on lower income ratepayers - PA Utility Law Project

-- Need to prioritize existing loads and ratepayers on the grid - PJM Market Monitor, PA Consumer Advocate, PA Utility Law Project

-- Require centers to take electrical service on an interruptible basis during supply shortage periods - PA Consumer Advocate, PA Utility Law Project

-- Authorize the PUC to set power curtailment priorities - PA Consumer Advocate, PA Utility Law Project

-- Encourage backup generation at centers other than diesel to reduce environmental impacts - PA Consumer Advocate

PA Environment Digest is highlighting their testimony because it is critical the public understand these impacts to cut through the hype surrounding the stampede to develop these facilities.

PA Utility Law Project

Patrick Cicero, Of Counsel to the Pennsylvania Utility Law Project is an organization which assists low income residential utility and energy consumers connect to and maintain affordable utility and energy services within their homes..

What If Legislature Fails To Act?

Rep. Mandy Steele (D-Allegheny) asked each of these three witnesses what if the General Assembly fails to act to protect ratepayers.

Cicero said-- “I think the reality is that the Commonwealth of Pennsylvania needs to do something.

“I often feel like in these conversations everyone's like, ‘Well, it's too bad to be true. It's too bad to be true that we have so much shortage then we're going to have blackouts.’

“It's not. We're going to have blackouts if we don't do something.

“And what that means is people lose their electricity and people will die, right?

“This is serious. So we need to do something.

“So I think if we have an all-of-the-above generation strategy, we need to have an all-of-the-above regulatory and legislative strategy.

“The General Assembly needs to take the action it can, the Public Utility Commission needs to take the action it can, PJM and stakeholders need to take the action that they can.

“Don't separate what Dr. Bowering's advocating for, with what Mr. Lawrence is advocating for.

“These things go hand in hand in resolving the affordability and reliability crisis.”

PA Utility Law Project Testimony

Chair Fiedler, Chair Causer, members of the Committee, it gives me great pleasure to be here, especially that I get to share it with Joe Bowring and Daryl Lawrence, who are two people I deeply respect.

My name is Patrick Cicero. I serve as Of Counsel to the Pennsylvania Utility Law Project. We are a legal aid office that represents the interests of Pennsylvanians experiencing poverty in the energy and utility space.

We Are In A 100-Year Flood And People Are Drowning

So earlier today we heard the Data Center Coalition talk about how we just essentially need to use the “old wine skins” to continue to do cost allocation the same way that it's worked for a hundred years. There's no reason that it can't work now.

My response to that is what we actually have is a hundred-year flood, and people are drowning.

I Choose Grandma Over Google

And in Rep. Cerrato’s question, she asked about what would you say to a grandmother in her district [about rising electric bills]?

My response is, I choose you over Google.

In the context of Grandma versus Google, grandma should win every day. That should be the policy statement of the Commonwealth of Pennsylvania.

We are here because of the 13+ million Pennsylvanians, the 5.2 million households who make and break this Commonwealth.

And yes, we need data center development, we need economic development that helps the Commonwealth flourish, and all of us use data centers.

Supply Problem In The Face Of Exponential Load Growth

But as Dr. Bowring talked about, as Mr. Lawrence talked about in the context of his testimony, we have a supply shortage.

We have a problem, and that problem is real and it is exponential electricity load growth causing exponential price increases for consumers.

So I want to contextualize this a bit. Dr. Bowring talked about $30.8 billion in new [PJM] capacity payments in the last two auctions, $16.6 billion of which are kind of, but for data centers being in that.

That $16.6 billion was paid for by existing PJM customers, including Pennsylvania households. This is represented visually on page two of my testimony.

350,000 PA Households Terminated Last Year

And what I want to really hone in on is the vulnerability of Pennsylvania households in our current climate.

Last year more than 350,000 Pennsylvania households experienced involuntary termination of their electricity and gas service to their home.

Over 24,000 Pennsylvania households entered winter without a safe heating source last winter. This drives a cascade of negative consequences for families and communities.

350,000 households is nearly 7% of all Pennsylvania households.

7% of all Pennsylvania households lost electricity or natural gas service to their homes last year.

And this is before the price increases that we had as a result of the [PJM] capacity market, the energy side of the equation, as well as the significant number of electric rate cases that happened last year, are happening this year and are going to be happening next year.

This year is shaping up to be no better.

Electric Utility Terminations Up 30% So Far This Year

From January to August of 2025, there have been 282,604 utility terminations, with electric utility terminations up nearly 30% over last year.

So we need to act and we need to act clearly, and now with a calm voice that says we're prioritizing the human beings and businesses who occupy the Commonwealth of Pennsylvania.

PJM Capacity Prices To Increase To $163 Billion

Recent analysis by the Natural Resource Defense Council has demonstrated that by 2033, on a business as usual approach, those [PJM] capacity prices, we will pay $163 billion [over next 8 years].

And the question is, who are we paying it to?

We're paying it to existing generators who are not building more, and 81% of that $163 billion is being paid to existing supply.

Data centers aren't paying it right now because there are not very many of them around [yet].

They're projected to be around, but by 2033, they're projected to only pay 12% of that cost, 12% of the increased cost of $163 billion.

The rest of us in the PJM circle are paying for that.

So by 2033, we'll pay new supply 7%, 12% is being paid for by data centers.

So 7% of all Pennsylvania households losing their electric service, I would argue is untenable before the price increases that we have now.

Electric Rates Increased 5% to 40% In 2025

Beginning in June of 2025, the electric distribution utilities in the Commonwealth all increase their price to compare.

That is the price that residential consumers and small business customers pay if they're not shopping with a competitive electric supplier.

These high [PJM] capacity prices drove a spike in the default service prices across the state with residential consumers paying between 5% and 40% more depending on their electric distribution utility. (This is on table two of my testimony.)

$400 More A Year In PPL Territory

In PPL service territory, where we sit here in central Pennsylvania, a household who heats with electricity will pay $400 more per year because of the changes in the utility default service prices in June of 2025.

$400 more per year, on average, if you heat with electricity because of the June 1, 2025 price increases.

So we do have this stark choice about how we're going to protect Pennsylvania ratepayers.

I agree with the proposals that have been put forth by the Office of Consumer Advocate. They're well-thought-out. It should be made part of this legislation.

I also agree completely with Dr. Bowring about the role that PJM has in the capacity market and at PJM.

Need To Prioritize Existing Loads

The simple fact of the matter is that we don't have enough supply to serve all of the load that's being asked, and we have an obligation to prioritize the load that exists already.

I want to focus on one thing and then I'll just rely on my written testimony for the remainder of the time that we have together.

And that one thing is the legislation needs to include a requirement that large loads, and I agree with the Chairman of the Public Utility Commission, we shouldn't talk about commercial data centers. We're talking about large loads.

It's mostly commercial data centers, but let's talk about large loads.

Large Loads Should Pay For Energy Assistance Programs

So large loads are causing price increases for consumers. They should pay to help mitigate that price increase.

And so the one thing I would offer is that we have a suite of programs. They're called Universal Service Programs, the Customer Assistance Program, the Low Income Usage Reduction Program.

With the exception of the Philadelphia Gas Works and Pittsburgh Water and Sewer Authority only residential customers pay for those programs in the Commonwealth of Pennsylvania.

But we know that data centers, large loads and other interconnecting large loads are causing massive price increases.

We estimate that about $36 million in price increases are a direct result of the June 1, 2025 price to compare increase that is driven by these capacity market prices.

That $36 million is the increase in cost to support these programs.

So residential ratepayers are paying $36 million more to support economically vulnerable rate payers.

I completely support that. I just think data centers should pay part of that cost.

So one of the solutions that I have in there, and you can see the solution that I have in my testimony, is that the General Assembly should require contributions from large load additions, and require them to take responsibility for these direct and substantial rate increases by paying for these universal service costs.

This can be done legislatively, it can also be done administratively.

The Public Utility Commission has the authority already. They have just not yet, as we sit here today, acted on that.

So we think that one change to House Bill 1834 would be a requirement, as outlined in my testimony, that all customer classes, including commercial data centers, contribute to the public utilities universal service programs.

It would create regulatory flexibility at the Commission to set appropriate rates for collection from all customers, including commercial data centers. But it does not single out large load.

Increase LIHEAP Contributions

The last thing I'll say, the LIHEAP [Low-Income Energy Assistance Program] contributions that are in there are great, but woefully inadequate.

These are trillion-dollar companies. They can afford millions of dollars to contribute to LIHEAP.

We don't have a federal budget and we don't have a state budget.

We don't know when we're getting either of them, but we know on November 1st LIHEAP is supposed to open and it's not going to.

That is going to create a parade of horribles in our Commonwealth.

Households that heat with deliverable fuels are going to use plug-in electric space heaters and drive up their electricity bills at extraordinary rates.

And this is extraordinarily problematic.

My recommendation and testimony is that for every 25 megawatts of data center load, it's got to be at least a million dollar contribution to the state LIHEAP fund that's allocated in the legislation.

I have lots of other things I would love to say about this.

For the sake of time, I'll rely on my written remarks, and be happy to respond to any questions that any members of the Committee have.

Thank you.

Click Here for copies of written testimony.

Click Here for Part I of the hearing video - industry, business, unions, PUC, utilities

Click Here for Part II of the hearing video - Independent PJM Market Monitor, Consumer Advocate, PA Utility Law Project

Click Here for House Energy Committee summary.

Rep. Elizabeth Fiedler (D-Philadelphia) serves as Majority Chair of the House Energy Committee and can be contacted by calling 215-271-9190 or click here to contact. Rep. Martin Causer (R-Cameron) serves as Minority Chair and can be contacted by calling 717-787-5075 or by sending email to: mcauser@pahousegop.com.

Data Center Stampede Trampling PA Ratepayers:

-- Data Center Stampede Trampling PA Ratepayers Part I: PA Utility Law Project - Utility Terminations Up 30% Already; Prioritize Existing Loads; Centers Need To Help Pay For Utility Assistance [PaEN]

-- Data Center Stampede Trampling PA Ratepayers Part II: PA Consumer Advocate - PUC Should Set Conditions For Centers To Be Served By The Grid; Set Power Curtailment Priorities [PaEN]

-- Data Center Stampede Trampling PA Ratepayers Part III: PJM Market Monitor - Data Centers Have Cost Existing Ratepayers $16.6 Billion Already; Centers Should Bring Their Own Power Generation To Prevent More Large Price Spikes [PaEN]

-- PA PUC To Take Up Model Tariff For Connecting Large Load/A.I. Data Centers To The Electric Grid At Nov. 6 Meeting; Other Changes Needed [PaEN]

-- PUC Votes To Suspend, Investigate PPL Electric's Proposed 7%, $356 Million Rate Increase [PaEN]

NewsClips On House Energy Committee Hearing:

-- WITF: PA House Committee Considers Shielding PA Ratepayer’s Wallets From A.I. Data Center Energy Costs

-- WHYY: PA Legislation Aims To Protect Ratepayers From A.I. Data Center Energy Strain, Costs

-- WESA - Rachel McDevitt: PA Lawmakers Consider Rules For A.I. Data Centers; Industry Warns Of Over-Regulation

-- Tribune-Democrat: PA Lawmakers Weigh Economics, Grid Failure As Regulations Considered For A.I. Data Centers Energy Use To Prevent Further Electric Cost Spikes [PDF of Article]

Resource Links - A.I. Data Centers: