Maryland citizens hit with $2B power grid upgrade for out-of-state AI

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The Maryland Office of People’s Counsel (OPC), a state agency that represents its utility consumers, filed a complaint before the Federal Energy Regulatory Commission (FERC) regarding PJM Interconnection, LLC’s plans to charge it $2 billion of the $22 billion it spent to upgrade its grid to accommodate increasing demand from data centers. According to the OPC’s press release, this $2 billion bill will cost the state’s consumers an extra $1.6 billion in the next ten years alone — that means an extra $823 million for residential (approx. $345 per customer), $146 million for commercial (approx. $673 per customer), and $629 million for industrial customers (approx. $15,074 per customer).

“Without FERC action, Maryland customers face paying billions for transmission infrastructure that PJM is advancing to benefit data centers,” said Maryland People’s Counsel David S. Lapp. “PJM’s cost allocation rules are broken. Maryland customers have neither caused the need for these billions in new transmission projects nor will they meaningfully benefit from them.”

PJM Interconnection, LLC is the United States’ largest electricity transmission company, and covers 13 states plus Washington, D.C. This includes Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia, covering about 65 million people, or about 20% of the entire U.S. population. Some of these states, including Maryland, host a large number of data centers, so the firm needs to upgrade its infrastructure to meet projected demand from these power-hungry AI systems.

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However, the state argues that PJM’s methodology for allocating costs places an unfair burden on Maryland ratepayers. The OPC argues that the forecasted growth for the state is nowhere near the figures for other states, including Virginia, Ohio, Pennsylvania, and Illinois, which play host to many more data center projects. If the electricity transmission firm keeps its current computation, it would mean that Maryland customers are subsidizing the upgrade costs for projects that do not directly benefit the state.

Maryland says that these infrastructure costs should be charged directly to the areas where they’re being constructed, or, as President Donald Trump made tech companies promise with the "ratepayer protection pledge," the companies themselves should be billed directly for these grid upgrades. The OPC said there is “extreme uncertainty” regarding load growth driven by data center demand, and that utility providers tend to benefit from these upgrades even if the demand never materializes. This is especially true because the costs of these investments are borne by existing utility customers, not by the data centers themselves, if the data centers do not follow the “ratepayer protection pledge.”

This is one of the biggest reasons why many AI hyperscalers are facing pushback from the communities where they intend to place their data centers. At the moment, around 69 jurisdictions have passed some sort of moratorium on projects like these, and a survey has shown that nearly half of Americans do not want a data center in their neighborhood. Debates around these projects are passionate, with a few cases turning violent and even resulting in shootings (thankfully, without any casualties), especially as many feel that the construction of these power-hungry assets is threatening their lifestyles and quality of life.

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TOPICS See all comments (7)

Jowi MoralesContributing Writer

Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.

7 Comments Comment from the forums

• the data centers really made the "I hate the environment" pledge Reply
• Who would have thought this boondoggle / scam / bubble (I hate to be redundant, yet here we are) is expensive!!
  
  But don't worry fellow peasants, because " President Donald Trump made tech companies promise with the "ratepayer protection pledge"
  
  A promise?? A pledge!! LOL!! Sounds so reassuring..... especially these days!!
  
  The Tech Bros are laughing all the way to their Swiss banks while the peasants pay the bill.
  
  PS: The AI defenders (who it seems don't live in those states) will be busy defending this AI socialism any moment now.....(I'd love to see how they would spin this as not "socialism" for the rich!! Reply
• Exactly because this administration does not have a track record for keeping pledges or promises. I'm surprised there was even an attempt to hold the industry accountable for the consequences of large water and electric resources they would be using. Reply
• This is the harsh reality. And not for just one US state, but also for an ever-growing list of countries around the world where AI Data Centres are becoming more prevalent. In my country, 23% of total electricity consumption is by these AI data centres. And, we are only a country with a 5 million population. As it stands general consumers and business are having to absorb the electricity cost during the build of these centres (which IMO should be charged to the companies building these, before they even get planning), but also the initial costs for having to add infrastructure to handle the capacity.
  
  IMO, the tech industry should be paying for all cost related to the setup in advance of being the e go-ahead to build. Not retrospectively as is now. Stop ripping off the people who really can't afford much higher costs. We are already at the bottom. Also, in my country there are over 300,000 consumers (families, normal Joe Soaps) that are currently in debt with electricity and gas supplies. This is unsustainable. Reply
• SOS, DD. Reply
• Meh, you'll pay it and you'll like it. Tech bros dictate. It's all fouled up beyond any recognition and folks won't stop their cultural wars long enough to even know it's happening. And the natural world? Apparently the hell with it. This is a class war and you are going to see the biggest transfer of wealth this country has seen in the next 5 years... and no one will do a damn thing about it because everybody is too busy hating on their neighbors. The bourgeoisie has the proletariat fighting one another and the government funding the expansion of it's interests everywhere else. Huxley, Orwell, and Carlin would be proud. Reply
• Thread is already heading towards derailment.
  
  Closing thread according. Reply
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