I would love a follow-up on how states are competing against each other to get data centers - and what legislation they are purposing to control consumer costs - huge hot button issue in statehouses across US
Great question, John — and one that deserves more than a quick answer. A full deep dive is coming, but here's the short version.
PJM is ground zero. Capacity auction prices went from $29/MW-day to $333/MW-day in three years — an 11x increase.
Data center load accounted for $6.5 billion, or 40%, of the $16.4 billion in the latest auction.
Northern Virginia's Data Center Alley is hitting physical transmission limits, with Dominion zone load forecasts jumping from 5,700 MW to over 20,000 MW in just three years.
Residential bills in D.C. jumped $21/month; New Jersey prices rose 22%.
Nine PJM-state governors wrote a joint letter warning the grid operator was costing their states billions in lost investment.
The NRDC estimates capacity costs could hit $163 billion cumulatively through 2033 without reform — a $70/month hit to the average household.
Ohio is where the most creative regulatory response is emerging.
AEP Ohio got PUCO approval for a first-of-its-kind data center tariff: new data centers must pay for at least 85% of their subscribed electricity whether they use it or not, commit to 12-year service agreements, post financial assurance, and pay exit fees if they bail.
AEP had already imposed a moratorium on new hookups while the case was pending — prospective data center requests in their territory had hit 30,000 MW against a current peak demand of just 4,000 MW.
The legislature is now pushing to extend that framework statewide, with bipartisan bills banning utilities from shifting data center infrastructure costs onto other ratepayers.
And just this week, a group of Ohio citizens filed a petition for a constitutional amendment to ban data center construction outright.
Texas took yet another path with SB6: data centers are welcome, but they pay their own interconnection, face mandatory curtailment during grid emergencies, and must disclose duplicate queue requests across the state.
Georgia Power got similar authority to charge non-standard rates to any customer over 100 MW.
The pattern is the same everywhere: the competition to attract data centers has shifted. It's no longer about who can offer the best tax incentive package — it's about which states can assure their own voters that welcoming a gigawatt of AI load isn't going to bankrupt them on their electricity bills. That's a cost allocation fight, and it routes straight back to the grid.
You'll love this one:
https://substack.com/profile/17500538-neil-winward/note/c-236064357?r=af3i2&utm_source=notes-share-action&utm_medium=web
I would love a follow-up on how states are competing against each other to get data centers - and what legislation they are purposing to control consumer costs - huge hot button issue in statehouses across US
Great question, John — and one that deserves more than a quick answer. A full deep dive is coming, but here's the short version.
PJM is ground zero. Capacity auction prices went from $29/MW-day to $333/MW-day in three years — an 11x increase.
Data center load accounted for $6.5 billion, or 40%, of the $16.4 billion in the latest auction.
Northern Virginia's Data Center Alley is hitting physical transmission limits, with Dominion zone load forecasts jumping from 5,700 MW to over 20,000 MW in just three years.
Residential bills in D.C. jumped $21/month; New Jersey prices rose 22%.
Nine PJM-state governors wrote a joint letter warning the grid operator was costing their states billions in lost investment.
The NRDC estimates capacity costs could hit $163 billion cumulatively through 2033 without reform — a $70/month hit to the average household.
Ohio is where the most creative regulatory response is emerging.
AEP Ohio got PUCO approval for a first-of-its-kind data center tariff: new data centers must pay for at least 85% of their subscribed electricity whether they use it or not, commit to 12-year service agreements, post financial assurance, and pay exit fees if they bail.
AEP had already imposed a moratorium on new hookups while the case was pending — prospective data center requests in their territory had hit 30,000 MW against a current peak demand of just 4,000 MW.
The legislature is now pushing to extend that framework statewide, with bipartisan bills banning utilities from shifting data center infrastructure costs onto other ratepayers.
And just this week, a group of Ohio citizens filed a petition for a constitutional amendment to ban data center construction outright.
Texas took yet another path with SB6: data centers are welcome, but they pay their own interconnection, face mandatory curtailment during grid emergencies, and must disclose duplicate queue requests across the state.
Georgia Power got similar authority to charge non-standard rates to any customer over 100 MW.
The pattern is the same everywhere: the competition to attract data centers has shifted. It's no longer about who can offer the best tax incentive package — it's about which states can assure their own voters that welcoming a gigawatt of AI load isn't going to bankrupt them on their electricity bills. That's a cost allocation fight, and it routes straight back to the grid.