As part of a ramped up effort to monitor large-scale data centers in Delaware, a new senate bill would require a regulatory approval process.
While small data centers exist in the First State, discourse around the newly proposed Project Washington in Delaware City, and the rise of energy-hungry entities in the region as a whole, has caused state leaders to step in.
For State Rep. Frank Burns (D-Pike Creek), the main concern is the strain these massive data centers will put on the region’s electric grid, which is already facing a serious generation problem.
Senate Bill 205, which Rep. Burns is cosponsoring, would require businesses using 30 megawatts of electricity or greater to first gain a certificate to operate from the Delaware Public Service Commission (PSC) — the state body in-charge of regulating utility services.
“Basically, it's a way of making sure that [businesses' plans] goes along with what the state's laws are and look at the impact on the environment, on the health, safety and welfare of the general public," Rep. Burns explained.
Under the bill, data centers would have to certify the regional grid has enough electricity supply to power the entity, report the economic impact such a center could have on ratepayers and prove the data center is aligned with the state’s renewable energy goals.
While data centers across the PJM electric grid have increased energy demand, therefore increasing utility prices, the large-load entities also require more power lines and transformers, which ratepayers have also been footing the bill for.
"There's also congestion because basically, you can't shove too much electricity through a wire, so congestion, it can cause a 20-fold difference in pricing for electricity at different locations across the PJM grid. So it can impact the economy by making electricity more expensive for everyone else is using it, both businesses and individual homeowners," Rep Burns said.
The legislation would also require data centers to demonstrate experience in operating expertise and long-term viability, which Rep. Burns says is to combat cases of data centers being set up and then abandoned.
“We need to protect Delawareans. Electricity is going to be in very short supply, not only in Delaware, but throughout the PJM grid. We import almost all of our electricity. A lot of it comes out of Pennsylvania. Pennsylvania's building out data centers, and they're not going to be able to continue net exporting the way they have been," he said.
The legislation comes as the PSC is in the process of implementing a large-load tariff, or special electricity rate, for data centers.
Rep. Burns introduced a separate bill to codify that requirement. The legislation would ensure the creation of "a separate [utility] rate for large energy-use facilities that mitigates the risk of costs associated with expanding infrastructure and maintaining reliability in the face of growing demand from being shifted to residential, small business, and other electric customers."
Both pieces of legislation cannot be voted on until January at the earliest, but it comes as the proposed Project Washington data center is working on gaining state-level approval.
The center is estimated to consume 1.2 gigawatts of electricity per hour – an amount that would power nearly twice the amount of homes that exist in Delaware.
In a letter to New Castle County, Starwood Digital Ventures — the project's developer — wrote it anticipates construction of the first phase to begin in the summer of 2026, and the data center would begin operating in early 2028.
