Data centers will require significant upgrades for electricity transmission and distribution, millions that are already being invested to attract these cyber facilities to build in the Commonwealth.

“It is going to happen . . . it needs to happen,” said Christine Martin, president of PPL Electric Utilities.

Martin was joined by state Rep. David Rowe, a Republican and chair of the House Policy Committee, and for a short while at the meeting, Becky Ford, Amazon Web Service, principal, Economic Development – Global Infrastructure Expansion.

She said this kind of major investment is meant to “have that innovation in our backyard,” and more.

“It is going to happen and it is either going to happen in a place like Pennsylvania, where we are equipped with the resources, whether it is our infrastructure, the fuel infrastructure, the workforce infrastructure – all working together to make this a success, or it will happen around us and my company will be building transmission lines that go across the state as opposed to infrastructure that serves economic development in our communities,” Martin said.

Data centers are the heart of the AI revolution, providing cloud computing service, logistics and storage for nearly every sector of the digital economy.

“This isn’t an issue of whether it is going to happen,” Martin said, answering a question posed by Jason Fink, Williamsport-Lycoming Chamber of Commerce president and CEO.

In fact, PPL Electric Utilities invested about $13 billion dollars over the past decade to modernize the grid, strengthen reliability and prepare for increased demand, Martin noted.

Not a question of if, but where

Over the past decade, PPL Electric Utilities has invested heavily in upgrading transmission and distribution, adding the utility has the wherewithal and capacity to connect power to such data centers but that doesn’t mean it does not need to continue upgrades to improve systems – not only for large load draws but also as a responsibility to help all customers benefit from this growth. For example, PPL most recently has committed to a $6.8 billion investment to expand grid capacity and modernize transmission.

Large draws of electricity while protecting small businesses and residential customers

“With significant load growth forecasted over the next decade, where is Pennsylvania’s electric system compared, and what considerations and challenges do you see to avoid shortfalls, and what role should the state play enough reliable generation exists to meet both the current needs and the demands while not jeopardizing the Commonwealth’s economic health and prospects in other areas?” Fink asked the panelists.

“I mentioned the transmission system,” Martin said. “We have 50,000 miles of transmission and distribution,” she added. “That requires continued upgrades, investments,” she said, adding that these upgrades are meant to accommodate resiliency and growth.

“I feel confident in the reliability of our system,” she said.

A generation component.

Pennsylvania is a net exporter of electricity, operating in PJM – a regional transmission organization – that helps utilities interstate. PJM is made up of 13 states and the District of Columbia.

“We produce more electricity than we use in the state,” Martin said. “Pennsylvania has been the engine for PJM for decades,” she said.

That is not going to change tomorrow, but, she noted, it is “certainly under stress.”

That is because the surrounding states are being served by Pennsylvania’s electricity.

“That’s not necessarily a bad thing,” Martin said, adding, “we’ve got the economic engine here and we are helping to supply the region, but we need to ensure that the state and region are keeping up,” she said.

“I can build all the transmission and distribution that I want . . . I have to have the electrons that flow through that.”

That is why ratepayers are starting to see price increases on bills from PPL and suppliers where customers may shop because it is the market sending a signal that demand is increasing and supply needs to come up to speed, Martin explained.

That is where PPL is focused, legislatively, she added.

The utility wants generators to build and be successful in those efforts, but it also has concerns in what is being seen in terms of data centers and otherwise, she noted.

As such, PPL Corp., an affiliate of PPL Electric Utilities, announced a partnership with Blackstone last year to build generation specifically to serve data centers in the Commonwealth, according to Martin.

“It is a situation where we’ve got a good foundation, but we need utilities, generators, our regional partners, our national partners and our customers to come together to make sure that our small business, our residential partners, are not harmed,” she said.

From a transmission standpoint, there is a tariff in place – that has not been memorialized – for companies such as Amazon, which provides safeguards for all other customers.

It requires specific load commitments, financial commitments, exit fees for large users, Martin said.

Large load users are making a five- to- 10-year commitment that matches the load supply given up.

“We are recouping any costs that are placed on the system,” she said.

“For any reason they exit the system early there are financial securities . . . so no other customer is harmed, so customers are benefitting from large loads and not being penalized in any way,” Martin remarked.

Meanwhile, there are legislative efforts to protect consumers.

Rowe, who chairs the House Policy Committee, noted how the committee, for those who didn’t understand, doesn’t pass bills, but rather, is a fact-finding committee of the House.

The policy committee members go out into the communities and hold hearings, learning and hearing from those testifying, such as small and large business owners, stakeholders, and others and take that information back to Harrisburg to craft better policy.

The start of this most recent session included putting together what is called the Mid-Atlantic Energy Alliance – made of legislators from Pennsylvania, New Jersey, Delaware and Virginia.

There was a hearing in October and a follow up hearing in Annapolis earlier this year with a “cautionary” tale.

“They have decommissioned all but, I think, one of their coal-fired plants,” Rowe said. “They have reduced their ability to generate by multiple gigawatts,” he said.

That is why Maryland has to import 40 % of their power from Pennsylvania, and New Jersey has to import as does Virginia.

“What we are seeing is this totally lack of reliable form of generation from the shuttering of these plants,” Rowe said.

He added that getting Pennsylvania out of the Regional Greenhouse Gas Initiative (RGGI) last year was a massive win for the generation industry because, he said.

He added that “ever since Gov. (Tom) Wolf entered us into RGGI in 2019 there has been one new thermal generation facility come online in Pennsylvania.”

“It took seven years, but we were finally able to get RGGI off the table and we have generators who are interested in coming back to Pennsylvania,” he said.

Maryland, not surprisingly, incurred a limited blackout last year, and the fact that such discussion occurs when Pennsylvania is part of a grid that has Marcellus Shale under its feet, and enough coal to power the country should not be occurring, according to Rowe.

“I was with a coal miner in Northumberland County a couple of months ago who said ‘you can power the country with the hole under that hill but we just can’t use it,”’ Rowe said.

“The fact that we are failing to capitalize on our natural resources, and our residents are paying the cost of higher and higher bills and enduring blackouts, it kind of sounded the alarm in Harrisburg that we need to put all of the options on the table,” he said.

To counter this, Martin and Rowe made reference to legislation that is in the House Energy Committee. H.B.1271, introduced by state Rep. Perry Stanbaugh, representing the state’s 86th District of Perry and some of Juniata counties. It would essentially allow the electrical distribution companies to petition the Public Utility Commission, and if there is a projected resource inadequacy basically saying, ‘Hey, we don’t have enough repeat demand, lights are going out,’ it gives the PUC the ability to say then we are going to create our own power,” Rowe said. The copy of the full bill is available online, as Rowe summarized it for the meeting.

“It’s our job to sell power, we need to have power to be able to sell it,” he said, of the bill which he noted has broad bipartisan support.

“The solution is very simple – get more generation,” using limitless resources available in the state.

“Our job in Harrisburg is to make sure the generators and commission have the ability to get that power out of the ground and to consumers.”