States Rethink Energy Costs for Data Centers Amid Push for Clean Power
As data centers proliferate across the United States, several states, particularly within PJM territory, are re-evaluating how these facilities contribute to local energy costs. States like Illinois, Indiana, New Jersey, Ohio, and Virginia are crafting regulations to ensure these energy-intensive operations shoulder more financial responsibility.
In a strategic move, Pennsylvania’s Governor Shapiro has issued an executive order granting preferential treatment to data centers that comply with sustainability requirements, though it doesn’t prevent non-compliant data centers from operating in the state. Those that do not comply, however, are expected to navigate more rigorous review processes by local and state authorities.
While the Pennsylvania Public Utility Commission (PUC) operates independently, its chair, Stephen DeFrank, supports the governor’s initiative, emphasizing that Pennsylvanians “should not be asked to subsidize infrastructure needed to serve some of the largest energy users in the world.”
The Data Center Coalition, representing these facilities, has shown general support for Shapiro’s directive. Dan Diorio, the Coalition’s executive vice president of state policy and government affairs, cautioned that changing rules midstream could impact ongoing investments in responsible data center projects.
Shapiro’s plan also advocates for clean energy by instructing the Department of Environmental Protection to expedite processes for clean power projects on brownfields and developed lands. Data centers that sign the consent order must incrementally increase their use of carbon-free power sources, from 10% in 2027 to 32% by 2035.
A related legislative effort, having passed the state House but not yet the Senate, seeks to limit diesel generator usage by data centers, a measure backed by Tom Schuster of the Sierra Club’s Pennsylvania chapter as a means to minimize pollution during grid power interruptions.
While these policies aim to encourage data centers towards clean energy solutions, the NRDC’s Lang-Ree notes it’s uncertain how effective they will be in driving the adoption of alternative energy sources. As fossil gas plants are proposed to meet energy demands, their costs and completion timelines are extending into the early 2030s.
Despite these challenges, Pennsylvania boasts over 3 GW of energy projects ready to connect to the PJM grid, many of which are solar, wind, or battery-powered, according to data from RMI. Clean energy projects, being more economical and quicker to develop than traditional gas-fired power plants, could play a crucial role if states streamline permitting processes.
Original Story at www.canarymedia.com