These are the same comments the House Consumer Protection, Technology and Utilities Committee and the Senate Environmental Resources and Energy and Consumer Protection and Professional Licensure Committees heard in hearings last May [Read more here]; the Senate Republican Policy Committee heard in August [Read more here]; and the House Energy Committee heard during a hearing in October [Read more here].
Jan. 26 Voting Meeting
The House Energy Committee is scheduled to consider House Bill 1834 (Matzie-D-Beaver) authorizing the Public Utility Commission to adopt regulations for data centers to protect ratepayers and the electric grid.
As introduced, House Bill 1834 would give the PUC authority to set: Financial security requirements; Calculations of contributions in aid of construction; Minimum contract terms; Load ramping schedules; Exit fees; Measures to mitigate circumvention of customer size thresholds; Revenue and cost tracking requirements; End-of-contract processes; Curtailment; Cost recovery parameters; Low-income assistance; and Renewable energy requirements.
Click Here to read more about this meeting and related hearings on January 26, 27 and February 2.
Key Comments From Jan. 20 Hearing
Here are some important comments made during this hearing--
Stephen M. DeFrank, Chairman, PA Public Utility Commission said-- “Current macroeconomic conditions and energy market trends have brought utility affordability front and center for regulators, policymakers, and households alike.
“These include: persistent inflation, supply chain constraints, burgeoning electricity demand, and the inability to construct baseload electric generation.
“Further adding to customer bills are the significant increases in electric transmission prices. The average cost of transmission has increased from $3.50 per megawatt-hour (MWh) in 2001 to $17.70 per MWh in 2021, an approximately 400% increase.
“Customers who do not benefit from these upgrades should not have to pay for the cost of the upgrades.
“Such pressures have been compounded by several Pennsylvania-specific policy and market factors that directly affect customer bills. [Note: Read more about these issues in the PUC testimony.]
These include, but are not necessarily limited to:
-- The net-metering loophole (applicable to EDCs),
-- Tier II credit market supply imbalance (applicable to EDCs), and
-- municipal restoration fees (applicable to NGDCs).
“This ‘storm’ of price headwinds resulted in an unprecedented number of general rate cases at the Commission in 2024, with 31 individual fixed utility rate proceedings that year.”
“As energy costs rise and affordability concerns reach more households across Pennsylvania – including many facing these challenges for the first time – the Commission’s work does not stop at rates, rules, or enforcement.
“A critical part of our responsibility is making sure people understand what is happening, what options are available to them, and where they can turn for help – especially during periods of uncertainty.
“We are committed to navigating these trying times in coordination with the General Assembly to ensure customers maintain access to safe and reliable utility service.
“It is more evident than ever that the topic of affordability requires attention from policy makers and regulators alike. The Commission will continue to focus its efforts toward addressing these significant challenges.”
Darryl Lawrence, PA Consumer Advocate, said-- “Addressing energy affordability is vital to the safety, health, and economic well-being of Pennsylvania utility consumers. Energy runs our homes, schools, businesses, public safety organizations, and healthcare systems.
“Reliable and affordable energy drives the Commonwealth’s economic growth and development."
He said Pennsylvania residents are paying higher energy prices for electricity and natural gas services in terms of: supply and transmission charges, utility distribution rates and applicable rate riders (DSIC charges, Universal Service Charges, Act 129 and Alternative Energy Portfolio charges).
He noted that 9 out of the 11 electric utilities experienced price to compare increases from 1% to 11% in December, with an average increase of 7%.
"While Pennsylvania residents are paying higher energy prices, the 2024 retail electricity price in Pennsylvania, at 12.51 cents/kWh, was slightly less than the national average of 12.94 cents/kWh."
"For natural gas supply, which heats approximately half of the households in the state, when comparing the delivered price of natural gas in 2024 to the price in 2025, residents experienced month-by-month increases."
“Rising energy costs in Pennsylvania are driven by several key factors--
-- Unprecedented growth in electricity demand caused by data centers and artificial intelligence (AI);
-- Electric generation supply deactivations, interconnection delays, and supply chain problems;
-- Expensive electric transmission grid investments;
-- Significant utility investments in aging distribution infrastructure;
-- Volatile natural gas prices and fuel costs; and
-- The use of certain alternative ratemaking mechanisms to set distribution base rates.
“Combined, these forces create upward pressure on electricity and natural gas bills for households and businesses across the state.
“30 years ago, Pennsylvania restructured its electric system. Generation planning and construction became a function of the competitive market; local transmission planning was largely left to our electric utilities; and, regional transmission planning was left to PJM.
“In a period of low and stable electricity growth (from 1996 to 2025, the average electricity growth rate in Pennsylvania was 0.4% per year), restructuring has generally served Pennsylvania well.
“However, the unprecedented increase in projected demand caused predominately by data centers and AI has clearly shown we are in a new era. These new challenges require a rethinking of the status quo.
To that end, I have four recommendations for this Committee to consider--
-- Data Centers Must "Pay Their Own Way": Data centers are already causing electric prices to increase for all consumers. Beyond the current market impacts, my office is currently seeing proposed transmission infrastructure build outs to accommodate new data centers where the costs of these projects are being largely allocated to existing customers, not the data centers that are “causing” these costs to be incurred.
“This situation must be rectified, and quickly. I strongly recommend that this body vote in favor of legislation to ensure that any new data centers in Pennsylvania must pay for any and all costs that they are causing that would not have been needed “but for” the presence of a data center.
-- Establish a Pennsylvania Agency to Coordinate Integrated Resource Planning for the Electric Sector
-- Protect Consumers Who Roll Off Their Fixed-Priced Retail Electricity Contracts
-- Remove Weather Normalization for Natural Gas Customers: WNA mechanisms should no longer be authorized as an acceptable form of alternative ratemaking in Pennsylvania.”
“Hand in glove with energy affordability is reliability. A reliable and affordable electricity sector is necessary for the State’s economic growth and to protect the public’s safety and health.
“Adding large loads to the Pennsylvania electricity system that would lead to power curtailments and unaffordable prices is counterproductive to this end.
“As the OCA has advocated in filings before the Commission and FERC, regulators and utilities should ensure that electric service to new AI data center loads will not degrade the reliability or quality of service that the utility must provide to existing consumers (i.e., will not result in utility service that is subjected to frequent emergency curtailments or rolling blackouts).
“In summary, rising and volatile energy prices and increasing reliability risks to the grid are real, substantial, and require thoughtful and meaningful legislative and regulatory action.
“The legislature can address energy affordability by making data centers pay their own way, removing the natural gas weatherization adjustment for consumers, implementing safeguards to protect residential electricity consumers from being rolled over to high-priced variable contracts without their knowledge, and filling the gap between generation investments and transmission planning that exists.”
Elizabeth R. Marx, PA Utility Law Project said-- “In 2024, 1 in every 4 Pennsylvania households reported having difficulty paying their energy bill.
These extraordinarily high energy burdens are, quite literally, pricing Pennsylvanians out of the market for basic energy services – forcing an increasing number of families to forego food, medicine, medical care, child care, and other basic needs to keep energy on in their homes.”
“Hyperscale data centers and other large load customers seek unprecedented amounts of energy to power artificial intelligence and other industrial-scale operations.
“While much of the forecasted increase in load on the grid to serve planned data centers has not yet materialized, the costs associated with the build-out are already impacting other Pennsylvania ratepayers – including hundreds of thousands of low-income households already struggling with acute energy insecurity.”
“Even assuming no other generation (default service) rate increase takes effect over the next 12 months (which is unrealistic in light of continued record capacity, energy, and transmission prices), residential consumers at the four major EDCs (PECO, PPL, DLC, and FE PA (encompassing MetEd, Penelec, Penn Power, and West Penn Power)) will pay an estimated $940 million more for generation next year following the dramatic increase in default service rates in June and December 2025.”
“We have identified and quantified one additional, substantial cost shift. As a result of the increase in default service prices, driven primarily by projected data center load growth, the cost of providing rate assistance through utility-run Customer Assistance Programs (CAPs) now cost ratepayers over $57 million each year.
“While expected load growth needed to serve data centers and other large load customers is already driving up utility rates, it is impossible to tell at this point how much demand will actually increase.
“Tech companies have flooded utilities with at least five to ten times more data center proposals than will ever get built, “raising the risk of costly system overbuilding.
When it comes to data center load growth, there is no “due” burden for Pennsylvania families to bear. Pennsylvania families are already struggling profoundly to afford basic energy services to their home.
“Any costs shifted from the tech giants building massive data centers to residential consumers must be stopped.”
Marx noted 60% of Pennsylvania’s electricity is generated by gas-fired power plants. And as a result, current increases in LNG gas exports are having a significant impact on electricity rates.
“The practical impact of increasing gas exports on Pennsylvania families is undeniable.
“Between this year and next, LNG export capacity is expected to double, further exposing Pennsylvanians to instabilities in the world market for gas.
“Just last week, the Energy Information Administration projected that gas prices will remain relatively flat in 2026 but will increase 33% in 2027.
“EIA attributes this anticipated growth to expanded LNG capacity and higher gas consumption in the United States.
“In light of the projected increase in gas exports overseas, and the increased need for energy here at home to power the unprecedented projected load growth associated with data centers, domestic gas prices are expected to continue rising dramatically across the state.
Pennsylvania families must not be forced to compete with other countries for energy to power their basic needs.”
Asim Haque, Senior VP For Governmental and Member Services with the PJM Interconnection, said-- “This month, PJM issued its 2026 Long-Term Load Forecast. This latest forecast confirms the trend of significant growth in electricity demand over the next 20 years....
“Demand increases in PJM are being driven primarily by data center proliferation.
“PJM believes that the forecasted increase in demand is an “all hands on deck” event, and that we will need all our resources to meet both the opportunity and challenge that this demand increase presents.
“Our reserve margin has declined, and as our reserve margin continues to decline, prices are likely to increase. Simply put, as supply decreases and demand increases, prices will go up.
“The bottom line is that rising capacity prices are indicative of the tight supply/demand environment we are experiencing and could rise further should conditions persist or worsen.”
Evan Vaughan, Executive Director Mid-Atlantic Renewable Energy Coalition said-- “Natural gas makes up almost 60% of electricity consumption in the Commonwealth, and the rising and often volatile cost of natural gas has a direct impact on the wholesale price of electricity passed along to ratepayers.
“The best way to stabilize wholesale energy prices is to add zero marginal cost resources like solar and wind to the grid. These inexpensive resources bring down the overall cost of energy because they have no variable fuel cost and save our natural gas supplies for when they are needed most.”
“At the same time that electricity demand is rising rapidly, the pace of new generation coming online has been insufficient. Retirement of older, inefficient power plants has outstripped the addition of new generation resources.
“New natural gas turbines face multi-year equipment backlogs and rising prices, new coal generation is not economically competitive, and small modular nuclear reactors have yet to be commercially deployed in the United States.
“By contrast, large-scale solar, onshore wind, and battery storage projects can be built and deployed relatively quickly—if the right policies are in place.
“Today, many clean energy projects are delayed or cancelled due to long interconnection queue timelines, high interconnection costs, financing challenges, siting and permitting hurdles, and supply chain constraints.
“These barriers limit new supply and exacerbate the very market imbalance that is driving higher prices.”
“Pennsylvania’s (and PJM’s) energy affordability challenge is fundamentally a supply-and-demand problem: demand is growing quickly, while too few new generating resources are being added to the grid.
“ Policymakers should therefore focus on policies that accelerate the deployment of new, cost-effective generation.
“Even after the eventual phaseout of [federal] Inflation Reduction Act tax incentives, large-scale solar and wind remain the lowest-cost options for new electricity generation.
‘Ensuring these resources can come online is critical opportunity to add supply quickly and at the lowest possible cost to consumers.’
Andrew S. Stubbs, President & CEO, Energy Association of PA, said-- “One of the most significant recent drivers of electric bill increases has been the dramatic rise in capacity costs over the past two years, which is a passthrough cost that electric distribution utilities do not control.
“Pennsylvania and the PJM region are experiencing electricity demand growth not seen in decades, driven by data center development, electric vehicle adoption, building electrification, and energy-intensive industries like advanced manufacturing and AI.
“Before consuming a single kilowatt-hour, every Pennsylvania household and business is now paying substantially more just for the promise of electricity availability.
“These are not abstract market numbers; they translate directly into higher electric bills for every Pennsylvania customer. This is a regional challenge affecting the entire PJM footprint, but Pennsylvania customers are bearing significant costs.
“Many of Pennsylvania’s energy policies were enacted decades ago and have never been comprehensively reviewed to assess their effectiveness or their cumulative impact on customer bills.”
[Among the issues mentioned by the Association are: restoring the open border for renewable energy credits; updating net metering requirements; updating the Act 129 utility energy efficiency program; and reforming Act 14 utility customer billing regulations.]
“Pennsylvania faces unprecedented energy affordability challenges requiring thoughtful, comprehensive solutions.
“We must ensure fair cost allocation that protects residential customers, address capacity cost drivers, improve electric retail market outcomes, review decades-old mandates, and support the utility investments that make Pennsylvania an energy leader.”
Kristina Montgomery, Senior Director of State and Regional Policy Engagement for Vistra Corp [major power plant owner], said-- “The Commonwealth should view increased load growth as a good thing. Load growth signals economic development which increases tax revenue and creates jobs for Pennsylvanians across the state.
“It is imperative that Pennsylvania continues to signal that the Commonwealth is open to welcoming this growth and the necessary infrastructure development to support these economic development projects, which will ultimately lead to increased prosperity for all Pennsylvanians.
“However, because this load growth is increasing at the same time PJM is facing resource retirements, we need to ensure we have adequate generation to meet this demand.
“In the near-term, Vistra believes that the load growth challenge can be met with load flexibility and programs like demand response.
“But Vistra also appreciates the urgency expressed by policymakers about the need to bring generation online expeditiously to meet increasing demand.
Time and again, the data shows that competitive markets provide the best outcomes to consumers in terms of lower electricity rate growth, lower emissions, and greater reliability.
“Infrastructure spending will continue, but the way we manage those investments determines whether we burden customers with escalating fixed costs. Pennsylvania needs to be disciplined in finding ways to optimize the system, rather than oversizing it.”
[Note: Vistra has been active in buying Pennsylvania power plants and locking them up for use by A.I. data centers, not “ordinary people.” Read more here.]
Testimony/Video
Click Here to watch a video of the hearing.
Click Here for written testimony (combined in one file).
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.
Rep. Danilo Burgos (D-Philadelphia) serves as Majority Chair of the House Consumer Protection, Technology & Utilities Committee and can be contacted by calling 717-72-2004 or click here to contact online. Rep. Carl Metzgar (R-Somerset) serves as Minority Chair and can be contacted by calling 717-260-6432 or click here to contact online.
NewsClips:
-- Post-Gazette: PA House Members Hear Warnings On A.I. Data Centers, Rising Electric Costs At Hearing
-- Tribune-Democrat: Electric Grid Concerns Aired By PA Lawmakers As Frigid Weather Settles In
Resource Links:
-- House Energy Committee To Consider Bill Giving PUC More Authority To Regulate A.I. Data Centers Jan. 26; Hearings On Related Bills Jan. 26 and Feb. 2 [PaEN]
-- Gov. Shapiro Secures Federal Support To Extend PJM Electric Generation Auction Price Cap; Call For Emergency PJM Auction To ‘Build Big Power Plants Again’ [PaEN]
-- PJM Interconnection Board Proposes Its Own New Plan To Integrate A.I. Data Centers, Large Loads Into Grid To Maintain Reliability [PaEN]
-- Utility Dive: PJM Updates 20-Year Forecast Of Electricity Demand Growth, Reducing Short Term Growth Estimates By Up To 2.6%, Increasing 2035 Estimate By 3.3% [PaEN]
-- 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]
-- PUC Chairman Highlights 'Extraordinary Challenges' Pennsylvania Families Are Facing This Winter With Energy Bills And His Appreciation For Groups Providing Assistance [PaEN]
-- PJM Electric Auction Impacts: 1 In 5 PA Households Report Problems Now Paying Energy Bills; Electric Utility Shutoffs Up 38.1% So Far This Year [PaEN]
-- PJM Electricity Auction: PJM Lost 2.8 Gigawatts Of Power Due To Reduced Reliability Rating Of Natural Gas Power Plants; Could Gain 12.2 Gigawatts By Increasing Reliability From Less Than 75% Now To An Achievable 90% [PaEN]
-- PA Energy, Environmental, Citizen Advocates Call On PUC To Protect Ratepayers, Communities From Costs, Impacts Of A.I. Data Centers [PaEN]
-- Spotlight PA: Map Shows Growing Number Of A.I. Data Centers Planned Across Pennsylvania
-- Vistra Corp Buys 2 More PA Natural Gas Power Plants; Facebook/Meta Buys 20 Years Of Power From Beaver Valley Nuclear Plant; 18 PA Power Plants Now Locked Up To Feed A.I. Data Centers [PaEN]
-- Sen. Boscola To Introduce 6-Bill Package To Protect Pennsylvania Communities And Ratepayers From Large-Scale A.I. Data Centers Rapidly Expanding Across The State [PaEN]
-- PA House Committee Approves Legislation Giving Local Officials Greater Say Over Regional-Scale Developments Like A.I. Data Centers, Warehouses [PaEN]
-- In Case You Missed It: A.I./Data Center Articles - NewClips From Last Week - January 12 [PaEN]
[Posted: January 21, 2026] PA Environment Digest
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