Pennsylvania PUC Advances Tariff to Limit Data Center Power Costs

The Pennsylvania Public Utility Commission advanced a proposed model tariff on Thursday to protect residential and small business electricity ratepayers from rising costs driven by AI data center demand. The guidance targets large energy users requiring more than 50 megawatts individually or 100 megawatts in aggregate to ensure they do not shift infrastructure expenses onto the general public.

Key measures in the proposal include charging fees to developers who terminate contracts before investment costs are recovered and permitting large-load customers to construct their own infrastructure upgrades. The commission also recommended that electric distribution companies recover all necessary interconnection costs directly from the customers, with the exception of previously planned upgrades.

Commission Chairman Stephen DeFrank introduced the amendments to address explosive load growth and prevent Pennsylvanians from being burdened by the cost of abandoned or unused infrastructure. While the model tariff provides recommendations rather than binding regulations, it responds to billion-dollar increases in generation costs within the PJM Interconnection region. The Data Center Coalition commended the framework's transparency, while the Pennsylvania Utility Law Project previously warned that such upgrades could make energy unaffordable for residents.