Delaware is taking steps to draw a firm line as energy-hungry data centers continue expanding across the country and as communities worry they could be left footing the bill.
A new package of laws signed by Delaware Gov. Matt Meyer aims to ensure that residents and small businesses are not forced to subsidize the massive electricity needs of hyperscale facilities.
Here's what to know
According to local outlet WHYY, the new measures are meant to block data centers from rolling the costs of operating facilities and upgrading infrastructure onto everyday ratepayers. They also make those facilities ineligible for tax credits tied to job creation.
PJM Interconnection, which runs the regional grid, has pointed to data center growth as one factor behind rising bills. The large server-filled buildings that power cloud services, online storage, and artificial intelligence can use huge amounts of energy as well as water. As WHYY reported, state projections show demand tied to these developments could drive average wholesale electricity prices up by more than 80%.
The new law requires Delmarva Power to establish a separate, higher electricity rate for hyperscale data centers.
At the bill signing event, Meyer described the package as a matter of fairness and grid reliability, saying, "Delaware is open to innovation, investment, and economic growth, but growth must be responsible. It cannot come at the expense of those who live here."
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More background
The events unfolding in Delaware reflect a national debate over who benefits from data center development and who ultimately bears its burdens.
Data center supporters often point to economic development and new tax revenue as benefits tied to the facilities. Critics, meanwhile, argue that residents can be left coping with higher utility costs, more pollution, and added infrastructure strain.
That concern is especially acute in places where families are already struggling with expensive monthly power bills. If large industrial customers add major demand to the grid without paying the full cost, those costs can be passed on to households and smaller businesses.
Meanwhile, resource concerns extend beyond energy use. Environmental advocates say data centers can put heavy pressure on local water supplies because many facilities use substantial amounts of water to cool servers and prevent overheating.
Roby Anstett, executive director of the Claymont Coalition for Environmental Justice, told WHYY that residents need stronger protections before projects move forward.
"We're already hearing concerns from residents about private wells and water quality," Anstett said. "People should not be left with unanswered questions about pollution, noise, water, or infrastructure costs while companies get the benefits."
What's being done?
Taken all together, the new Delaware laws are intended to address several parts of how major data centers draw and supply power.
In addition to requiring data centers to cover grid-related costs whenever possible, the measures require those facilities to cut power use during peak-demand periods to help prevent outages.
Legislation signed by Meyer would also "require data centers to generate their own energy to power their operations over a 10-year period," according to WHYY. That electricity must comply with Delaware's renewable energy portfolio standards, so qualifying sources can include wind, solar, or nuclear energy.
That approach is not unheard-of, either, and is particularly more common in Europe, but some American data center operators, such as Mara Holdings, have been increasingly turning to wind turbines for power. Canadian data center company Hive has also pursued hydroelectric power for a data center in Paraguay.
The new Delaware laws additionally address backup power. Rather than relying heavily on diesel generators that can worsen local air quality, a portion of backup energy will have to come from cleaner sources.
State Rep. Debra Heffernan, D-Bellefonte, said public feedback helped shape the laws. Environmental groups have also applauded the measures.
"There are still a lot of issues that we have to deal with on the local level," Dustyn Thompson, director of the Delaware chapter of the Sierra Club, told WHYY. "But in terms of their impact on energy bills, again, you don't get a more comprehensive package than what we've done today."
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