Why Should Delaware Care?
Delawareans have raised concerns that the energy demand from a single data center proposed near Delaware City could raise local energy bills. A recent Delmarva Power filing shows a total of five data centers in the pipeline, further calling into question exactly how the First State will meet that demand.
Delaware could see five new data centers with a combined energy demand reaching almost that of the entire state, according to a recent Delmarva Power filing.
On Dec. 19, the state’s largest energy provider filed a proposed large-load “tariff,” or electricity rate and service agreement, for energy-hungry facilities like data centers to ensure they do not shift energy infrastructure costs onto other ratepayers.
According to that tariff application, Delmarva is currently working with five data center developers, one of which is an “early stage prospect,” and the rest with “more advanced interest.”
Developers have proposed three data center projects in New Castle County so far, including a 6 million-square-foot facility in Delaware City dubbed Project Washington that has sparked a fight about regulating the industry in the county.
A Delmarva spokesperson did not say where the other two would be located, but said more information may be revealed as the large-load tariff is evaluated.
Those data centers would demand a combined 2 gigawatts (GW) of energy, the document says. The peak load, or demand for electricity, of the entire state is 2.3 GW in the winter and 2.7 GW in the summer, according to PJM.
That means the proposed data centers would together almost double the power demand for all businesses and homes in the First State.
Delaware Public Advocate Jameson Tweedie said this increase in energy demand would “drastically” shift the supply-and-demand dynamics of electricity in the state and could have “potentially enormous impacts” on consumer bills.
Tweedie said there is no way to know how much electricity bills could be impacted without complicated analysis.
Delmarva Power Region President Marcus Beal said he feels his company will be able to meet this growing demand. But he said he thinks the state legislature will need to pass new laws this session to help protect Delawareans from energy price increases.
“I think we are all recognizing the challenges that we have, and I think we’ve moved on now to the solution phase,” Beal said. “It will be an interesting session to see what steps we take to enable some of these solutions.”
Is the tariff fair?
The proposed large-load tariff would set a new electricity rate for data centers and require them to pay deposits to cover the engineering and equipment cost of electrical infrastructure improvements.
But Tweedie said he thinks Delmarva’s proposed large-load tariff does not go far enough to protect Delawareans from electricity price hikes spurred by data centers.
He said the tariff does not do anything to shield other ratepayers from the rising price of electricity due to growing data center demand, and it does not do enough to ensure data centers pay the full cost of transmission upgrades that are meant to serve only them.
Beal acknowledged that more needs to be done to protect its customers from high energy prices. But he pointed to other solutions, like increasing energy supply, rather than changing the tariff.
It’s up to the Delaware Public Service Commission, the state body charged with regulating utility services, to decide if the proposed tariff is fair.
In the coming months, the commission will hold hearings on the tariff with opportunities for public comment, Tweedie said.
Local unions, the state Department of Natural Resources and Environmental Control, Walmart and the developer of the Delaware City data center Starwood Digital Ventures have all been granted permission to join the proceeding.