OPC complaint challenges PJM cost rules for unfairly assigning $2 billion in data center-driven transmission costs to Marylanders
BALTIMORE – PJM Interconnection, LLC’s rules for assigning regional transmission costs driven by data centers violate the Federal Power Act and will unfairly inflate Marylanders’ electric bills, the Maryland Office of People’s Counsel said in a complaint today filed at the Federal Energy Regulatory Commission (FERC).
Of $22 billion in transmission project costs advanced over the last three years through PJM’s competitive regional transmission procurement windows, PJM’s rules for allocating these costs have unlawfully assigned Maryland customers responsibility for $2 billion in capital expenditures—costs that will be recovered in rates for decades and that will drive up Maryland customer bills by $1.6 billion over the next ten years alone, OPC’s complaint states.
“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.”
The relief requested in the complaint is also necessary to help fulfill the principles outlined in the “Ratepayer Protection Pledge,” signed by hyperscale data center developers at the White House on March 4, 2026, OPC’s complaint points out. That pledge states that the developers “will pay for new power delivery infrastructure upgrades to service their data centers, including adequate network upgrade costs to ensure that these expenses are not passed on to the ordinary household.”
OPC’s complaint challenges PJM’s “hybrid” transmission cost allocation methodology that broadly spreads costs that data centers cause across PJM. For high voltage projects (rated 500 kilovolts or higher), it allocates half of project costs across PJM transmission zones based on the proportion of demand each zone has relative to the entire PJM system. The other 50 percent is allocated using a “power flow” analysis that predicts how much of the power flowing through a particular transmission facility is consumed within each PJM area.
PJM is the regional electric transmission system operator serving all or parts of 13 states, including all of Maryland, and the District of Columbia.
OPC’s complaint—supported by a detailed expert’s affidavit—explains how PJM’s methodology creates severe financial consequences for Maryland ratepayers. Over the next ten years, the affidavit explains, PJM’s rules assign Maryland ratepayers—mostly customers of Baltimore Gas and Electric and Pepco—approximately $1.6 billion in added transmission costs to their electric bills over the next decade to support the energy demands of data centers, including:
- $823 million to residential customers (approximately $345 per average customer);
- $146 million to commercial customers ($673 per average customer); and
- $629 million to industrial customers ($15,074 per average customer).
The added costs to Marylanders bear no reasonable relationship to energy load growth occurring in Maryland, OPC’s complaint alleges. Forecasted load growth in Maryland is modest compared to Virginia and other areas of PJM, including Ohio, Pennsylvania, and Illinois, where demands driven by data centers are projected to grow substantially by 2036. The $22 billion in new transmission investment is overwhelmingly to meet the need created by data center demand. That means that Maryland customers are subsidizing data center-driven transmission buildout by virtue of geographic proximity and the pool-wide spreading of costs under PJM’s cost allocation methodology, not because they are causing the costs.
Ongoing efforts to address data centers through state-level “large-load tariffs” and utility “transmission security agreements” (TSAs) fail to remedy the problems with PJM’s rules governing cost allocation for regional transmission projects, OPC’s complaint explains. State large-load tariffs are laudable in that they seek to address costs associated with data center energy demands within a state, but they do not address costs assigned under PJM’s rules for transmission expansion costs driven by data centers located in other states. Likewise, TSAs that utilities have advanced fall far short of protecting customers from substantial data center costs and risks.
As a remedy to the unlawful subsidization of data center customers under PJM’s current methodology, OPC’s complaint asks FERC to require PJM to take immediate action to assign data center-driven transmission costs to the PJM zones where the data center customers are located (e.g., if located in Dominion Energy’s zone in Virginia, to the Dominion zone). Alternatively, depending on its rulemaking process for large-load customers, FERC should directly charge the transmission costs to the large data center customers, OPC argues.
OPC’s complaint highlights the “extreme uncertainty” of projections of data center load growth and points out that utilities benefit financially from transmission investments even if the projected load growth is speculative and the data centers never materialize, since most risks for electric infrastructure investments are borne by existing utility customers.
“We need immediate fixes to avoid billions of new costs placed on the backs of Maryland utility customers by data center energy growth,” Lapp said. “We need new rules to replace outdated rules that misalign the incentives of utilities that stand to profit significantly from building transmission, whether projections of data center growth are realized or not.”
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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