PJM Interconnection, which manages power for about 67 million people across 13 Northeast and Mid-Atlantic states, is expected to decide in December whether large tech companies like Amazon, Google and Microsoft will bear the costs of their rising electricity use or if those expenses will fall on customers through higher monthly bills.
PJM’s board plans to finalize its proposal Nov. 19 and submit it to the Federal Energy Regulatory Commission (FERC) soon after as part of its Critical Issue Fast Path (CIFP) process. The fast-tracked effort aims at deciding how to manage roughly 32 gigawatts of new electricity demand expected from data centers by 2030. The facilities house computer servers and hardware that support internet use, including artificial intelligence and cloud computing.
“This is a watershed moment. Never before have we had 32.2 gigawatts … It’s a huge amount of energy, which is going to cost a whole lot of money,” Hester said at a Wednesday press conference. “It’s really important to act collectively.”
Hester, a Democrat representing parts of Montgomery and Howard counties, privately met Wednesday with PJM’s independent market monitor, Joseph Bowring, and other energy experts as part of her newly formed PJM State Legislators Collaborative. Over 50 people, including legislators from all 13 PJM states and Washington, D.C., attended the group’s first meeting to discuss the costs and reliability risks for residents, PJM’s proposed solutions and ways legislators can influence the process.
“This first meeting is about building momentum and a unified front,” a spokesperson from Hester’s office told The Baltimore Sun in a Wednesday statement.
Lawmakers and consumer watchdogs have criticized PJM and the CIFP process, saying utilities and data center developers have dominated the discussion.
Gov. Wes Moore, a Democrat, has long criticized PJM’s “inefficient and outdated processes.” At a June conference, he noted that energy costs in Maryland, Delaware, New Jersey, Pennsylvania and Virginia have risen 23%-40% over five years.
“We know these increases have the biggest impact on low- and moderate-income families, and now is the time to answer the demand with increased generation,” he said.
In July, Moore joined governors from Illinois, New Jersey and Pennsylvania in filing comments urging PJM to protect ratepayers. In September, Moore and governors from 10 other states created the PJM Governors’ Collaborative, a bipartisan forum that allows leaders across PJM’s 13 states to act collectively on grid governance, energy affordability and market reform.
Hester’s office said the new collaborative aims to ensure state concerns are heard.
“Given the number of highly paid lobbyists from generators and data centers, we need to amplify the voices of the states, who are charged with protecting ratepayers,” the spokesperson said.
Del. Lorig Charkoudian, a Democrat representing Montgomery County, echoed Hester’s concerns at Wednesday’s news conference but stressed that it’s up to PJM — not local or state leaders — to address the issue. She noted that data center growth in one state can drive up costs in others, despite states’ efforts to manage reliability, affordability and climate goals.
“Sometimes I call PJM ‘the shadow government’ because despite our best efforts and what we do at the state level to address these issues,” she said, “PJM … has the ability to essentially run roughshod over our policy.”
Without reform, households across the PJM region could collectively pay an additional $163 billion through 2033 to keep the grid reliable, according to estimates by the Natural Resources Defense Council. NRDC also estimated that an average family in the region could pay $70 more each month on electricity bills by 2028.
“While Senator Hester is not proposing anything directly, she and the collaboratives’ #1 priority is to protect Marylanders/PJM residents from shouldering data centers’ costs,” the spokesperson said. “The proposal that they will advocate for will keep the grid reliable and ensure that private companies, not families, pay for the new demand they create.”
Hester and Charkoudian said PJM has not indicated who will bear the rising energy costs tied to new data centers.
“It’s important to remember that the default is that all of us pay,” Charkoudian said. “People are really struggling … you have to have a proposal that explicitly protects ratepayers in order for ratepayers not to bear the brunt.”
PJM’s Bowring could not be reached for comment by The Sun’s Wednesday deadline.
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