Md. grid operator nixes all 12 data center proposals as ratepayers face higher costs

Stakeholders at PJM Interconnection, the nation’s largest grid operator, on Wednesday rejected all 12 final proposals for regulating the rapidly growing data center industry, leaving the Maryland region without a clear path forward as electricity demand and customer bills continue to rise. The vote ends weeks of lobbying from utilities, tech companies, lawmakers and environmental activists. Following the vote, PJM President and CEO Manu Asthana stated that, although no proposal was selected due to an insufficient amount of “Yes” votes, the process provided “a lot of information” that the grid operator will review before deciding on next steps. “We’re going to study [the votes] closely . and try to think about all of the great input that we have received today,” he said, adding that the initially proposed December filing deadline to the Federal Energy Regulatory Commission (FERC) could change depending on the PJM Independent Board’s decisions. PJM Board Chair David Mills, framed the “arduous journey” to these rejections as a step toward a more holistic solution. “Just because none of these passed does not in any way mean that the board will not act,” Mills said. “You may not like every decision we make, but this will be one that we are well-informed on.” Mills emphasized that the Board intends to review all 12 proposals, picking out elements that meet its criteria including whether a plan maintains reliability, encourages new energy generation and allows new data centers to connect to the grid. To officially pass a proposal in PJM’s process, it needs more than two-thirds support within each stakeholder sector, Jeffery Shields, PJM senior manager for external communications, told The Baltimore Sun on Wednesday. He added that the board has ultimate authority and can “look at all the proposals in making its final decision” on the file submitted. Among the voters were representatives from PJM, the PJM Legislators’ Collaborative, the Natural Resources Defense Council (NRDC), the Maryland Office of People’s Counsel (MDOPC), Dominion Energy, and the Southern Maryland Electric Cooperative. Several of the rejected proposals would have required data centers to supply their own electricity, including the Protect Ratepayers Proposal, written by Sens. Chris Van Hollen and Angela Alsobrooks and Maryland state Sen. Katie Fry Hester all Democrats along with a bipartisan group of 10 Congressmembers. Hester, who represents Howard and Montgomery counties and leads the PJM Legislators’ Collaborative, told The Sun on Wednesday the proposal was “well received by the Board of Directors,” but criticized PJM’s governance, calling it “broken.” “Those that have votes have a financial interest, and there is limited representation on behalf of ratepayers and our constituents,” Hester said. “Our proposal is a comprehensive solution that provides reliability and affordability to the 67 million ratepayers in PJM, while providing incentives for data centers to join the grid more quickly. We must act now to avoid a massive transfer of wealth from the average ratepayer to the Fortune 500 Companies who stand to profit. It’s up to the PJM Board to take the next step.” Tom Rutigliano, a senior advocate for Climate & Energy at the NRDC, a group that worked alongside Hester to put on her proposal, also criticized PJM’s vote. “The growth of data centers is colliding with the reality of the power grid. PJM members weren’t able to see past their commercial interests and solve a critical reliability threat,” Rutigliano said in a statement. “Now the Board will need to stand up and make some hard decisions. We hope they fulfill their obligation to 67 million people and commit to protecting reliability, not subsidize data centers at public expense, and treat all customers fairly.” Julia Kortrey, deputy state policy director at Evergreen Action, an environmentalist group, said Wednesday in a statement to The Sun: “The effort to finally hold PJM accountable to consumers is gaining momentum, and PJM Members are clearly trying to avoid taking a stand . The PJM’s Board of Managers must do the right thing in the final vote this week. We urge them to stand with ratepayers, reject any plan that shifts costs onto households, and finally put lowering bills ahead of corporate profits.” Electric bills for many Marylanders have risen sharply in the past year, a trend partly driven by the rapid expansion of data centers in Maryland and Northern Virginia. The facilities, which house computer servers and hardware that support internet use, including artificial intelligence and cloud computing, have strained the region’s electric supply. PJM, which manages power for about 67 million people across 13 Northeast and Mid-Atlantic states, is planning to build new infrastructure to support the growing demand. The proposals were part of PJM’s Critical Issue Fast Path (CIFP) process, a fast-tracked effort intended to determine how the grid operator should manage an estimated 32 gigawatts and $163 billion worth of new electricity demand expected from data centers by 2030. Jeffery Shields, PJM senior manager for external communications, told The Sun that now the next step will be for the Board to direct staff to make a filing with “specific elements” in a public letter. He said it should be expected “in a matter of weeks.” The vote came two days after 60 environmental and watchdog groups, including at least 17 from Maryland and Virginia, urged PJM to require data centers to “bring your own clean energy” to avoid passing costs onto customers. MDOPC, which submitted a separate proposal, warned that without stronger rules, “residential customers will subsidize massive data center growth and be left vulnerable to reliability problems.” In a Nov. 12 press release, MDOPC’s David Lapp said data centers should be required to bring enough new generation to meet their own power needs and face consequences if they connect to the grid without it. Lawmakers and consumer watchdogs have long since criticized PJM and the CIFP process, saying utilities and data center developers have dominated the discussion. Maryland Gov. Wes Moore, a Democrat, has called PJM’s “inefficient and outdated processes.” At a June conference, he noted that energy costs in Maryland, Delaware, New Jersey, Pennsylvania and Virginia have risen between 23% and 40% over five years. In July, Moore joined governors from Illinois, New Jersey and Pennsylvania in filing comments urging PJM to protect ratepayers. In September, Moore and governors from 10 other states created the PJM Governors’ Collaborative, a bipartisan forum that allows leaders across PJM’s 13 states to act collectively on grid governance, energy affordability and market rules. In October, more than 50 bipartisan legislators from all 13 PJM states and Washington, D. C., attended the first meeting of the PJM State Legislators Collaborative, created Hester’s leadership to support the governors’ efforts and ensure state concerns are heard.
https://www.capitalgazette.com/2025/11/19/electricity-pjm-proposal/