OPC asks federal regulators to expand and clarify ‘show cause’ order on PJM data centers
BALTIMORE – The Federal Energy Regulatory Commission’s (FERC) June 2026 “show cause” order is flawed because it does not fulfill its stated intent to prevent regular households from paying for the massive electric infrastructure needs of data centers, the Office of People’s Counsel said in a FERC filing today that was joined by other state consumer advocates. Importantly, FERC’s order does not require the needed changes to existing PJM rules that, in their current form, guarantee that residential customers will bear data center-driven transmission costs, the filing says.
FERC’s June order required the regional grid operator, PJM Interconnection, LLC, to demonstrate that it is providing sufficient transparency on data center-driven transmission costs so that states can assign those costs “as they see fit.” But greater transparency, while important, cannot alone fix the problem, OPC’s filing points out, because PJM rules set the charges that transmission customers must pay and states have no authority to move costs from one transmission customer to another, including across state lines.
“State regulators cannot change PJM’s federally approved rules that are sending data center costs to Maryland residential customers,” said Maryland People’s Counsel David S. Lapp. “FERC must require PJM to fix those rules.”
OPC’s filing provides a simple hypothetical demonstrating how PJM rules spread costs driven by data centers to non-data center customers. The example considers a data center that raises peak energy demand by 200 megawatts and requires transmission investments of $232 million. The first-year revenues needed for the transmission total $36 million, but under PJM rules, $15 million of that $36 million, or 42 percent, would be paid for by non-data center customers. The hypothetical likely understates the costs such a data center would impose on other customers, the filing notes, because it ignores the impact of “baseline” transmission projects, the costs of which are spread across the PJM region and are the subject of a separate OPC complaint.
The hypothetical shows that PJM rules “inevitably” shift costs caused by data centers to other transmission customers, the filing observes, and the Federal Power Act (FPA) requires FERC to do more than simply recognize its “duty to address the risk of cost shifting”; it must also “remedy the actual cost shifts” that the PJM rules “guarantee[].” Further, the filing states, FERC’s order is contrary to the FPA because it “ignores substantial legal and practical obstacles” that may impede states from protecting retail customers from data center-driven costs.
“FERC’s order will help expose data center cost shifts by making them more transparent to state regulators and consumers, but the Federal Power Act requires PJM to also fix its rules that allocate data center costs to other customers,” Lapp said. “The order erroneously assumes State regulators have authority that they do not clearly have.”
OPC’s filing further requests that FERC clarify ambiguity around the costs data centers would have to pay under so-called “cost-recovery agreements” and the need to promptly credit revenues under such agreements to the customers that paid the added costs driven by the data centers.
OPC’s filing was joined by the Office of the Ohio Consumers’ Counsel, the Delaware Division of the Public Advocate, and the Office of the Illinois Attorney General.
For more information on OPC’s work on data centers, visit OPC’s website.
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers in 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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