Maryland’s Democratic congressional delegation is urging federal regulators to stop billions of dollars in electricity transmission costs tied to out-of-state data centers from being passed on to Maryland households and businesses.
In a letter to the Federal Energy Regulatory Commission, U.S. Sens. Chris Van Hollen and Angela Alsobrooks and U.S. Reps. Steny Hoyer, Kweisi Mfume, Jamie Raskin, Glenn Ivey, Sarah Elfreth, April McClain Delaney and Johnny Olszewski called on the commission to require PJM Interconnection to revise its cost-allocation rules. They argued that Maryland consumers should not finance infrastructure built primarily to serve hyperscale data centers in neighboring states.
“As members of the Maryland Congressional Delegation, we write regarding a pressing matter that has the potential to significantly raise energy costs for our constituents,” the lawmakers wrote. “PJM Interconnection LLC’s (PJM) existing transmission cost allocation rules result in the unjust assignment of billions of dollars in costs to Marylanders, contributing to unaffordable electricity bills.”
The lawmakers’ letter supports a complaint filed by the Maryland Office of People’s Counsel in FERC Docket EL26-63 challenging PJM’s existing transmission cost-allocation methodology.
According to the delegation, the rapid expansion of artificial intelligence (AI) has fueled one of the largest transmission build-outs in PJM’s history. Across its three most recent regional transmission planning cycles, PJM has approved approximately $22 billion in transmission projects needed primarily to serve data centers. Under the grid operator’s current rules, roughly $2 billion of those costs have been assigned to Maryland ratepayers rather than to the companies driving the increased electricity demand.
“Data centers being built outside of Maryland are driving one of the largest transmission expansions in PJM’s history,” the lawmakers wrote. “Across its three most recent regional transmission planning rounds, PJM has advanced $22 billion in projects needed principally to serve data centers. Under PJM’s current cost allocation rules, roughly $2 billion of those costs have been assigned to Maryland ratepayers rather than the data centers that are driving the demand.”
The delegation warned that unless FERC intervenes, Maryland customers could pay an estimated $1.6 billion over the next decade for those transmission projects. Residential customers would account for approximately $823 million of that total, or about $345 for the average household.
“Marylanders are already shouldering the immense burden of skyrocketing electricity costs, and it is unjust and unreasonable to force our constituents to subsidize the energy infrastructure needs of the wealthiest companies in the world,” the lawmakers wrote.
They argued that PJM’s cost-allocation rules have failed to keep pace with the unprecedented electricity demands created by AI infrastructure.
“PJM’s cost allocation rules have not kept pace with the build out of hyperscale data centers, just one of which can equal the electricity demand of a small city,” the delegation wrote. “PJM’s current rules spread costs broadly across the region regardless of where, and for whom, the underlying projects are actually needed.”
The lawmakers also warned that Maryland regulators have no authority to require developers in other states to pay for the transmission infrastructure created by their projects. They said forecasts calling for tens of thousands of additional megawatts of data center demand over the next two decades could leave Maryland consumers responsible for billions of dollars more in transmission costs. They also raised concerns that customers could be required to pay for projects tied to proposed data centers that ultimately are never built.
The fight over who should pay for the nation’s AI infrastructure has intensified as utilities and regional grid operators confront soaring electricity demand from data centers.
Public concern has also grown. Gallup found that 71% of Americans oppose AI data centers in their local communities, with concerns centered on energy consumption, water use, environmental effects and rising electric bills.
“AI data center[s] should be built in desolate areas like industrial zone[s], commercial area[s], city center[s] where there is no residential use for one reason, [and] electrical waves which will affect babies and kids’ developing brains,” social media user Tyrel Lee posted on X, formerly known as Twitter. “It has the same concern for power plant[s].”
The delegation acknowledged that FERC recently directed PJM and five other regional grid operators to justify or revise how they allocate costs associated with serving large electricity users. The lawmakers said those orders address future projects but do not resolve the billions of dollars in transmission costs that have already been assigned to Maryland customers.
“We also seek to obtain relief for our constituents from the billions in costs PJM has already assigned, and because most of those costs have not yet appeared on customer bills, timely commission action can prevent much of this harm before it occurs,” the lawmakers wrote.
The lawmakers closed by urging the commission to move quickly.
“We urge the commission to act expeditiously to provide relief from these costs for Maryland ratepayers, including as requested in OPC’s complaint,” they wrote. “Thank you for your consideration of this important issue that is essential to ensuring just and reasonable energy costs for our constituents.”
