Why Should Delaware Care?
Delaware residents have seen high energy bills due to a growing demand as new supply lags behind. And energy-hungry data centers threaten to worsen the problem. Delaware’s legislature passed a bevy of bills meant to prevent energy prices from continuing to spike.
Delaware lawmakers passed a sweeping set of legislation this year meant to address outrage over high energy prices.
Of the nine bills passed recently, three would impose new regulations on Delaware’s burgeoning data center industry, as its proposed energy hungry facilities that could dramatically increase electricity demand in the state.
The remaining energy legislation seeks to encourage renewable energy development, including by allowing solar fields to connect to the grid more quickly and by guaranteeing discounts for solar power.
Much of the legislative push happened during the final weeks of Delaware’s six-month legislative session, which ended June 30. It also came after Delaware residents had grappled with high electricity costs for more than a year — and made their displeasure about it known to lawmakers.
Still, lawmakers notably did not pass a bill backed by Delmarva Power that the utility’s officials said could push energy prices downward.
The legislation would have allowed the utility to own battery storage facilities for solar fields. While lawmakers had considered the bill for months, Sen. Stephanie Hansen (D-Middletown), said they only recently received the results of a study about how battery storage could benefit Delaware ratepayers.
She said lawmakers still have to figure out whether Delmarva Power owning battery storage would discourage private investment, since the utility is a regulated monopoly with some guaranteed profits.
“These are big discussions that will be happening soon,” Hansen said.
Regulating data centers
During the final hours of this year’s session, House Bill 445 received a full legislative approval when the House of Representatives voted 26-8 in favor of it.
The bill would require data center developers to supply all of the power a facility would use within 10 years of beginning operations. It also would require some of that power to be renewable.
An earlier version of the bill required all of the energy to be generated in Delaware, but an amendment allows electricity from nearby states as well.
The bills passed amid concerns that an influx of data centers in Delaware could drive up already lofty electricity prices. A recent independent analysis found that proposed data centers in the state could increase wholesale electricity prices by as much as 80%.
The energy production that data centers must provide under House Bill 445 has to follow the state’s renewable energy portfolio standards, which require Delaware’s utilities to derive 40% of their energy from renewable sources by 2035. The bill allows nuclear energy to count toward that percentage.
The bill also requires a quarter of data centers’ backup power to come from renewable energy. That requirement rises to 50% of backup power if the data center has not yet generated all its power when it starts operating.
Backup power for data centers has been a controversial issue in Delaware.
Lawmakers also passed House Bill 233, which would require the Public Service Commission, the state body in charge of regulating utilities, to create a “large-load tariff,” or electricity rate and service agreement.
The Public Service Commission is already creating this tariff, but the bill added specific requirements, such as contributions to a renewable energy fund.
The bill would also make data centers the first to be cut off from power in a blackout unless the project generates its own energy.
Lastly, the legislature passed House Bill 310, which would prevent data center companies from benefiting from tax credits based on the jobs they create.
Meyer said previously that he supports House Bill 233, but has not said whether he supports the other two bills. All three still need his signature to become law.
Boosting solar energy
The legislature also passed Senate Bill 239, which removes Delaware’s cap on when utilities can stop buying new energy from households with solar panels — a process known as net metering.
Delaware lawmakers had previously passed laws allowing households to sell excess energy to utilities, but they capped the amount of power that could flow back into the grid.
They did so out of concern for the impact on the power grid’s reliability, and for the possibility that electricity prices could go up for people who do not have solar panels on their roofs.
But Energize Delaware, a state-chartered energy nonprofit, later published a study showing that while net metering may raise energy costs in some ways, its overall effect on the grid financially benefits all energy customers.
Lawmakers also passed House Bill 269 and Senate Bill 210, which would require utilities to modernize the process of connecting large-scale solar power projects to the grid.
The legislation could help clear a backlog of solar field applications in Delmarva Power territory.
Meyer signed all of these bills earlier this year. He also fast-tracked permits for four solar projects across the state last month.
The governor has not yet signed Senate Bill 321, which would guarantee that any Delmarva Power customer signed up to get energy from solar fields will get at least a 10% discount on their energy bill from what the utility would have charged — even after participation fees.
Other energy bills
The legislature passed Senate Bill 326, which would limit Delmarva Power’s spending on non-mandatory infrastructure projects, among other provisions. The bill’s official summary states that such spending is a “major driver of rate increases.”
Legislators from the House introduced a last-minute amendment that would have blunted the bill’s impact, but it ultimately went through unchanged.
Meyer signed the bill into law on July 13.
Lawmakers also passed House Bill 393, which would regulate third-party power suppliers.
Delmarva Power customers can choose to get their electricity supply from another company, but in the past those companies were accused of misleading people into thinking they were part of the utility.
The bill requires third-party power suppliers to go through a training program and file reports about how many people use their services and how much it costs.
Meyer has not indicated whether he supports this bill.
