Legislation introduced by state Sen. Katie Muth (D-Monroeville) would prevent Pennsylvania residents and small businesses from paying for energy costs associated with data center operations.
The legislation, modeled after Oregon’s POWER Act, establishes a dedicated rate class for high-speed data centers, and requires them to fully cover the cost of their infrastructure buildout and operations, not residents and small businesses.
In a co-sponsorship memorandum to her colleagues, Muth said due to generative artificial intelligence and cloud computing data center energy use is projected to double by 2030. In Oregon, data center loads grew to over 10 percent of statewide electricity consumption, and projections put Pennsylvania in the same position. Muth said the state is poised to see growth similar to Oregon’s along major transmission corridors.
“With major data center projects proposed along PJM transmission lines, we must act before these projects are approved and costs are passed on to ordinary ratepayers through future rate increases,” she said in a statement. “Without reform, the cost of utility infrastructure built to serve massive data center facilities will fall on everyday Pennsylvanians, even though they receive little to no benefit from these projects. Oregon lawmakers acted decisively to stop this; Pennsylvania must do the same.”
Facilities designated as “high-load customers” would be required to pay the full incremental costs of energy and grid upgrades, according to Oregon’s bipartisan POWER Act. The law would also give regulators the authority to prevent cost-shifting and to protect residential customers from rate increases.
Muth said her legislation, which she plans to introduce soon, will mirror Oregon’s and will apply to new or expanding data centers with a peak demand of 20 megawatts or more. The legislation will also include power plants for co-located data centers and require long-term service agreements of 10 years or more to ensure facilities cover the infrastructure costs they generate.
Muth also said the legislation would set cost-allocation rules, monitor compliance and would require annual water and electricity usage reporting to support transparency and grid planning.