Making AI data centers cover the costs of their energy use requires help from legislators and others beyond Gov. Josh Shapiro’s reach.
For months, Pennsylvania Gov. Josh Shapiro promised a plan to blunt fast-rising energy costs by pushing power-hungry AI data centers to pay their own way. Now his office has released details of how he intends to turn BYOE — “bring your own energy” — into policy.
The question is whether it can curb consumer energy costs in a state on the front lines of AI data center development, where average household electricity rates jumped nearly 14% in the past year.
During a February budget address, Shapiro introduced the “Governor’s Responsible Infrastructure Development (GRID) Standards,” a set of policy principles aimed at addressing concerns about data centers. A central pledge was that developers would have to provide their own energy to receive state support.
The standards released Wednesday cover four areas: energy affordability, transparency, economic development and environmental protection. Developers would be required to build, bring online or purchase new electric capacity needed to meet demand while paying the full cost. They would also have to cover all costs associated with grid infrastructure upgrades triggered by their projects.
New generation must be located within the same grid region as the data center. Developers would also be required to use an increasing share of “clean firm” energy sources, including nuclear, hydroelectric, geothermal, solar, wind, hydrogen-fueled generation and long-duration energy storage. The standards call for 10% clean energy in 2027, increasing to 32% by 2035.
“I’ve heard directly from Pennsylvanians who are concerned about the impact data center development could have on their communities, the environment, and their utility bills,” Shapiro said in a statement.
Energy experts generally praised the direction of the proposal. John Quigley, a former state environmental protection secretary and senior fellow at the University of Pennsylvania’s Kleinman Center for Energy Policy, called provisions requiring developers to provide energy and pay infrastructure costs “a big step in the right direction.”
However, he noted that major pieces of the plan still require legislative approval.
Consumer advocates and environmental groups say additional measures may be needed to ensure data centers do not shift costs to ratepayers. Some have promoted a concept known as BYONCE — “Bring Your Own New Clean Energy” — emphasizing renewable generation and battery storage.
The proposal also faces political and regulatory hurdles. The Pennsylvania Public Utility Commission cannot require utilities to adopt new tariffs, and many decisions involving transmission lines and grid operations fall under the authority of PJM Interconnection and federal regulators.
Shapiro’s administration says it will work with lawmakers to codify the GRID standards into law. But with the state’s divided legislature and numerous regulatory agencies involved, experts caution that turning the proposal into reality may prove difficult.
“Nobody has all the marbles here,” Quigley said.
Source: PA Capital-Star