The White House’s recent Ratepayer Protection Pledge marks a pivotal moment in the national conversation regarding the electric system. As AI and data center infrastructure rapidly expand, the impact on the nation’s electric customers has moved from just an adequacy concern to a dire economic one. Highlighting the urgency, recent legislative proposals—such as the moratorium on AI development suggested by Senator Sanders and Representative Ocasio-Cortez—underscore a growing federal anxiety over our grid’s capacity and affordability.
While federal leadership is essential to ensure this boom is leveraged for public benefit, the heavy lifting of customer protection will ultimately fall to state utility regulators. It is at the state level where the most consequential decisions are made: how costs are allocated and how grid investments align with the public interest.
Recently, Mark LeBel unpacked how large load growth is driving up costs for consumers across the PJM Interconnection—the nation’s largest power market.
As a former Maryland Public Utility Commissioner, I have seen firsthand the complexities of shared jurisdictional authority. However, I also know that cooperative federalism is the only way to ensure energy services remain affordable, equitable, and sustainable.
Currently, those values are being sidelined. PJM’s independent market monitor, Monitoring Analytics, has repeatedly warned that speculative and actual data center loads are the primary drivers of skyrocketing capacity market prices and transmission expansion costs. In recent auctions, this demand contributed to billions of dollars in higher costs—charges that flow directly through to the monthly bills of families and small businesses.
High electric costs have tragic, real-world consequences. In my home state of Maryland, a record-breaking number of residents ended up in emergency rooms this winter due to carbon monoxide poisoning—a direct result of families resorting to unsafe heating practices when electricity becomes unaffordable.
Simultaneously, we risk sacrificing hard-won environmental gains. States have established strict health and climate mandates that are directly threatened by the rush to power energy-intensive infrastructure with whatever “fuel” is fastest, rather than what is best for communities. We cannot allow the “existential threat” of climate change to be sidelined by the “immediate demand” of a data center.
The solution is not to simply build our way out of this crisis and hope affordability follows. As clean energy entrepreneur and former DOE Loan Programs Office Director Jigar Shah has noted, the U.S. grid actually has 200–300 GW of unused capacity for the vast majority of the year. Our shortfalls occur during a mere 10–20 peak hours a year, usually driven by extreme weather. Building massive new power plants solely to meet those infrequent peaks is neither efficient nor cost-effective.
A more sustainable path—supported by recent analysis from The Brattle Group—suggests that better utilization of the existing grid could save consumers over $100 billion in the next decade. By shifting large loads, deploying behind-the-meter storage, and using “non-wires” alternatives, we can support economic growth without chasing peak demand at the ratepayer’s expense.
To ensure data centers are “good neighbors,” state regulators need a modernized toolkit:
- Performance-Based Frameworks: Rewarding utilities for efficiency and non-wires solutions rather than just capital expenditures.
- Strict Cost Allocation: Ensuring large energy consumers pay their fair share of infrastructure upgrades, including transmission, distribution, and generation, so the burden doesn’t shift to residential customers.
- Transparency: Establishing stronger expectations around data, disclosure and ongoing information sharing is key to effective planning and accountability.
- Big Tech Accountability: Requiring well-resourced tech companies to provide immediate affordability relief. We are already seeing successful models: Minnesota now requires data centers to contribute up to $5M annually to energy efficiency programs, and in Indiana, tech giants like Amazon, Google, and Microsoft recently committed millions to low-income support programs.
Affordability is a national priority, but it is delivered at the state level. If governed with clarity and care, the data center boom can result in a more resilient grid and a fairer allocation of responsibility. RAP stands ready to support states, utilities, and technology firms in upholding the commitments of the new federal pledge. We can meet the demands of the future without leaving our most vulnerable citizens in the dark.
