Pennsylvania is emerging as a prime location for data centers, attracting major companies like Amazon and Microsoft and promising an economic boost for the state. The appeal lies in affordable rural land, favorable property taxes, and readily available natural gas and electricity. However, this surge in data center development, driven by ever-increasing data demands – from critical government operations to online gaming and artificial intelligence – presents challenges for Pennsylvania’s energy landscape. Data centers require substantial electricity, creating competition with other sectors like transportation, heating, cooling, and manufacturing, all vying for power.

Allison Kaster, director of the commission’s Bureau of Investigation and Enforcement, highlighted the factors making Pennsylvania attractive to data center operators. Michael Fradette, representing Amazon Data Services, emphasized the escalating demand, noting their Luzerne County data center campus will consume electricity comparable to the city of Pittsburgh.

Electricity distribution companies, like PECO Energy, PPL Electric Utilities, and FirstEnergy Pennsylvania Electric Co., alongside grid operator PJM Interconnection, are grappling with this unprecedented demand. PJM anticipates a nearly 17% increase in peak demand by 2035, posing significant infrastructure challenges. Richard Webster, from PECO, characterized the potential growth as “unlike anything we have ever dealt with before.”

The Pennsylvania Public Utility Commission (PUC) is tasked with balancing the needs of the growing data center industry with the interests of consumers. PUC Chairman Stephen DeFrank aims to establish a regulatory tariff that facilitates rapid grid connections for large-load customers while safeguarding against cost burdens for consumers. This includes potential financial security requirements and incentives for developers who invest in their own infrastructure, minimizing risk to ratepayers. The commission recognizes the importance of accommodating business timelines while preventing costly, abandoned projects from impacting consumers. DeFrank described the situation as an “industrial revolution for the information age,” comparable to the invention of the printing press.

Public comments are being accepted until May 27, with replies to comments due by June 11.