Massive computing centers proposed across Pennsylvania could be a huge draw on the power grid, causing worries that electric bills will rise for the rest of us.
Data centers are proposed for the sites of the former Cheswick and Homer City power plants and the Alcoa research campus in Upper Burrell. Amazon recently announced plans to invest $20 billion to build data campuses in the state, starting in Luzerne and Bucks counties.
So-called hyperscale computing centers meant to advance artificial intelligence development require a lot of power, both to run the computers and to keep them cool. But it’s not yet clear how much new power generation or transmission infrastructure might be needed to accommodate them.
Pennsylvania’s Public Utility Commission held a hearing in April to gather input on how to manage these large load users and advocates are calling on the regulator to make sure its focus is on serving everyday Pennsylvanians.
Can data centers make a difference?
There are dozens of data centers in the Pittsburgh region. So far, they haven’t been cause for alarm.
But the potential for new, larger data centers are already having an impact on your electric bill, said Elizabeth Marx of the Pennsylvania Utility Law Project, pointing to the recent increase in electricity rates that took effect in June. Duquesne Light’s default electric rate jumped about 15% while West Penn Power’s rose 9%.
Those increases were due in part to the price to secure power-generating capacity in the regional electric grid that covers Pennsylvania. The grid operator, PJM, holds auctions during which power plants offer bids of what it will cost for them to be available to meet future needs. Those costs are paid by utilities and, ultimately, customers.
Last year’s auction to secure power for 2025-26 reached a total cost of nearly $14.7 billion. The cost to guarantee electricity for the previous year was $2.2 billion.
In 2024, PJM initially forecasted that large users, including data centers, could increase from less than 10,000 megawatts of use currently to about 20,000 megawatts by 2030.
After several utilities requested an adjustment based on requests from companies to connect, PJM found that large load users could actually demand around 32,000 MW by 2030.
PJM secured 146,570 MWs for use in its last auction to cover the region, which includes Delaware, Maryland, New Jersey, Ohio, Pennsylvania, Virginia, West Virginia and the District of Columbia, as well as parts of Illinois, Indiana, Kentucky, Michigan, North Carolina and Tennessee.
“The primary driver of the increased capacity costs are the projections that we’re going to have the influx of a ton of hyperscale users onto our grid,” Marx said.
Hyperscale users could demand 100 megawatts from the grid or more, about the size of a small city.
The federal Energy Information Administration projects electricity used for commercial computing will increase faster than any other use in buildings, rising from 8% of commercial sector electricity use in 2024 to 20% by 2050.
One analysis from the nonprofit Jack Kemp Foundation found energy prices could increase 25% to 70% for customers in northern Virginia covered by Dominion Energy, which has seen a large rise in data centers.
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How to protect ratepayers
The Pennsylvania Utility Law Project and PennFuture are both encouraging the PUC to adopt a set of terms and conditions for data centers that will protect other electricity users.
Many recommendations are aimed at increasing transparency. The groups want to make sure large users don’t underpay for the cost of electricity by negotiating special contracts, leaving others to make up any losses. They also want data centers to shoulder the cost of grid upgrades done to accommodate them.
“Ultimately, if new infrastructure does need to be built, those costs should be covered by the data center company itself,” said Donna Kohut, policy manager for sustainable economics at PennFuture.
Destenie Nock, who studies the power grid at Carnegie Mellon University, said it could be difficult to prove that a new power plant or grid upgrades only benefit one data center. A stable grid is good for everyone who uses it.
But Marx likened the scenario to building a home at the end of a dirt road.
“When you build a home at the end of a dirt road, you don’t get to just pave that dirt road and charge everybody on it the cost [to pave] because it also benefits them,” Marx said.
PULP, as part of the Coalition for Affordable Utility Services and Energy Efficiency in Pennsylvania, is asking the PUC to adopt the position that grid upgrades needed to support large load users are for those users’ sole benefit, unless there is quantifiable evidence to the contrary.
Asks from the groups also include requiring data centers to produce studies on how much power and new transmission their buildings will need and to put up collateral to be included in the forecast of energy needs. They say that will avoid unnecessary costs by avoiding building more infrastructure than is needed to meet real — not estimated — demand.
Marx also wants to see data center companies pay into utility assistance programs for low-income users. Those programs are currently funded only by other residential users.
“The need is going to grow and the cost associated with providing rate assistance to make sure that everyone can remain connected to the grid is going to grow,” Marx said.
Nearly 80,000 Pennsylvanians had their electricity shut off EditSign just in April and May this year, before electric rates rose in June.
Trade-offs
Kohut argues that many large data centers are built by wealthy companies and not meant to benefit regular Pennsylvanians.
But we do use them.
If you save photos in the cloud, or meet via video call, or ask ChatGPT for help writing an email — all that happens in a data center.
“I do think that we do all benefit from them,” said Nock. “The question is, what is the trade-off? What is the cost of us gaining that benefit?”
Nock said there are risks that come with adding a lot of high electricity users without a lot of planning.
For example, if power plants send too much electricity onto the grid and it’s not used, Nock said, wires can overheat, causing damage or an emergency shut off.
She said a rise in data centers without the transmission network to accommodate peak demand, such as during a heat wave, could lead to blackouts or brownouts.
PJM has forecast that older power plants are retiring before new plants can be built to replace them; at the same time, projected demand is growing faster than it has in decades.
The new demand could delay those retirements, said Nock, which would hurt goals to reduce harmful emissions.
“Because the rule is supply must always equal demand, if you need one megawatt to supply these data centers at night and solar is not on at night, then you will keep the oil power plant, you’ll keep the coal power plant,” Nock said.
Fossil fuel plants are more expensive to run than renewable sources such as wind and solar.
Some tech companies think power-hungry AI can actually be deployed to help the grid.
A blog post from computer chip maker Nvidia said the startup Emerald AI is developing a solution to let data centers be flexible users of electricity. It highlighted a field test in Phoenix in which the company reduced power consumption by 25% for three hours during a time of high grid stress.
Tech companies looking to expand their AI capabilities have promised that benefits will accompany their data center build-outs, such as added jobs and tax revenue. Many companies also have ambitious emission-reduction goals that could be harder to meet as data centers command more energy.
Kohut, with PennFuture, said the group will seek to hold these companies to their word.
“We will be watching those corporations as they come in to see what they’re doing to reduce their carbon footprint and to protect the health, well-being, and the climate for Pennsylvanians,” Kohut said.
