Pa PUC Vice Chair Kim Barrow States Proposed Data Centers Should Bring Their Own Energy Generation

I recently attended a presentation concerning a proposal to build a data center campus in Lower Mount Bethel Tp. Every member of the public who spoke were opposed to the idea While we all rely on data centers to store our Amazon orders or our Facebook pictures, we'd rather not see them. 

Now Northampton County has nothing to do with data centers. But Council member Jeff Warren would very much like to be State Rep. Jeff Warren. He can see which way the wind (hope it's renewable energy) is blowing. So he invited Kim Barrow, Vice Chair of the state Public Utility Commission (PUC) to make a presentation last week. She went on for 30 minutes before Council President Ken Kraft asked her to wrap it up. She went through a lengthy recent history of energy use in Pennsylvania. Her basic message is that any proposed data center should bring its own energy generation. 

Barrow said that Pennsylvania’s electric system is undergoing a dramatic transformation focused on reliability concerns, rising demand forecasts, aging infrastructure, and the pressure being created by extremely large data center projects tied to artificial intelligence and cloud computing.

She began by explaining that Pennsylvania is part of the PJM Interconnection, a 14-state regional transmission organization responsible for coordinating electric supply and reliability throughout much of the eastern United States. Pennsylvania historically has been one of the strongest electricity-producing states in the region, exporting roughly 25% of the electricity it generates.

For many years, Pennsylvania enjoyed relatively flat or declining electricity demand while maintaining a highly diverse energy portfolio that included natural gas, nuclear, coal, hydropower, oil generation, and renewable energy. Because of this diversity and excess generating capacity, Barrow stated she long believed Pennsylvania had excellent “resource adequacy” and strong reliability.

However, she explained that several developments have converged to create what she described as a “perfect storm” of challenges.

Among the major issues discussed were increasingly severe weather events, aging infrastructure, power plant retirements, supply chain disruptions, workforce shortages, cybersecurity threats, and the electrification of transportation and other sectors. She noted that stronger storms are becoming increasingly costly for utilities and more difficult to recover from operationally.

A major turning point in her concerns came during Winter Storm Elliott in December 2022. Barrow described the storm as a near-catastrophic event for the eastern electric grid. During the storm, PJM reportedly lost approximately 47,000 megawatts of generating capacity due to failures across multiple energy sources, including coal, natural gas, and renewable systems.

Coal piles froze, gas compressors malfunctioned in extreme cold, and renewable output declined due to weather conditions. She emphasized that the failures were not isolated to one type of generation resource but occurred across nearly the entire fleet.

According to Barrow, the region came within less than 1,000 megawatts of potentially severe cascading outages. She called it “a miracle” that widespread long-term blackouts did not occur.

One of her strongest messages was the importance of maintaining a balanced energy portfolio. While supportive of renewable energy growth, Barrow stressed that reliability requires maintaining all available resources, including nuclear, natural gas, coal, hydropower, and renewables, particularly during periods of extreme weather stress.

The second major portion of her presentation focused on the rapid rise of hyperscale data centers. Barrow explained that traditional data centers historically consumed between 50 and 200 megawatts of electricity. However, the newest AI-driven facilities are now requesting 1,000 to 2,000 megawatts each — amounts comparable to the output of entire nuclear power plants.

She specifically referenced the restart of Three-Mile Island through agreements tied to Microsoft and discussed Amazon Web Services’ arrangements involving the Susquehanna nuclear facility.

Barrow expressed concern that these enormous new electricity demands are arriving much faster than new generation and transmission infrastructure can be constructed. She warned that if data center growth proceeds unchecked, the grid could face serious reliability risks during future extreme weather events.

She cited PJM capacity auctions as evidence of growing stress within the system. Capacity prices reportedly jumped from approximately $35 per megawatt-day to over $300 per megawatt-day within a short period, creating an estimated $13 billion impact on ratepayers across the PJM region.

Barrow stated that these increases are being driven largely by forecasts of future electricity demand, especially from data centers, and not solely by current consumption levels.

A central theme of her remarks involved protecting residential customers, small businesses, and traditional commercial users from subsidizing the infrastructure costs associated with massive new industrial electricity consumers. She repeatedly stated that hyperscale data centers should “bring their own generation” by financing or constructing additional power sources rather than relying entirely on existing grid capacity.

She explained that the PUC recently issued a “large load model tariff” intended to ensure that large new electric users pay the true costs associated with serving their facilities and do not shift expenses onto ordinary ratepayers.