Pennsylvania Regulators Move to Protect Customers from Data Center-Driven Grid Costs

(HARRISBURG, Pa. – May 1, 2026) The Pennsylvania Public Utility Commission yesterday voted to approve a long-awaited Model Large Load Tariff outlining how large electricity loads such as data centers connect to and pay for the electric grid. The move marks a significant step toward protecting utility customers from rising infrastructure costs tied to rapid data center growth. While the Commission’s final order and tariff language are still pending, statements from Commissioners during the April 30 vote suggest the PUC may adopt some of the strongest customer protections in the country.

The stakes are high given the scale and speed of data center-driven growth. Pennsylvania utilities pursued roughly $500 million in transmission investments tied to large-load growth in 2024 alone. PJM Interconnection projects electric demand could increase roughly 39% by 2035, largely driven by data centers that are increasingly drawn to Pennsylvania.  

Most notably, Commissioners indicated large-load customers will likely be required to pay in advance for new utility infrastructure built to serve them. Environmental Defense Fund and other advocates filed formal comments urging the Commission to adopt a clear principle that large-load customers, not households and small businesses, should bear the costs of infrastructure needed to serve their facilities.

“The Commission took an important step toward protecting Pennsylvania customers from bearing the costs of rapid data center growth,” said Michael Zimmerman, Interim Director & Senior Attorney, Clean Affordable Power, Environmental Defense Fund. “Requiring large-load customers to pay up front for new infrastructure helps reduce the risk of cost shifting to families and small businesses while improving transparency and accountability.”

According to Commissioners’ statements, large load customers would pay the costs of all distribution and transmission facilities built to serve them, except for projects already planned before a customer requested service. That approach could go even further than some stakeholders proposed by requiring upfront payments rather than allowing costs to be recovered over time.

At the same time, important questions remain unresolved. The Commission has not yet clarified how it will define projects that were “already planned” before a customer requested service or what constitutes a customer “requesting service.” Without clear definitions, the final model tariff could inadvertently create loopholes that allow large-load customers to escape paying for infrastructure built to serve them. Commissioners also indicated the model tariff will:

• Establish minimum standards for contracts between utilities and large-load customers
• Allow large-load customers to construct certain infrastructure upgrades themselves
• Require large-load customers to contribute to low-income customer assistance programs

The Model Large Load Tariff will serve as nonbinding guidance. Utilities will still need to develop utility-specific tariffs through future proceedings before the PUC.

“We still need to review the final order and tariff language, but early indications are encouraging,” said Zimmerman. “The Commission deserves credit for prioritizing customer protections while navigating the complex and fast-growing challenge of data center-driven electricity demand.”