DELAWARE - Two bills have been passed in the Delaware House that lawmakers say will protect energy reliability while ensuring the costs associated with large energy-use facilities, like data centers, are not passed onto residents and small businesses. Both bills are now headed to the Delaware Senate for consideration.
To illustrate the impact data centers could have, lawmakers say Delaware electric customers use roughly 11.3 million megawatt hours of electricity every year, but a single data center would consume 8.7 million megawatt hours of electricity in that same time. This increased strain on the existing grid creates several risks for ratepayers, including rising energy prices, energy shortages, and costly infrastructure upgrades.
The first of the proposed bills that hope to offset some of these risks is HB 233 (S). It would order the establishment of a comprehensive framework to protect Delaware ratepayers from taking on the costs associated with facilities like data centers. Specifically, large energy-use facilities would be required to fully bear the costs of any new energy infrastructure that is required to support them.
Under this bill, data centers and other facilities would also be required to pay any increased capacity market costs they create, which cannot be passed onto residential customers, small businesses, or other ratepayers.
To accomplish this, the legislation requires Public Service Commission-regulated utilities, like Delmarva Power, to establish a separate rate structure for these types of facilities. Furthermore, facilities will also be required to enter into service agreements meant to protect existing customers from future rate shifts. Any large energy-use facility built in Delaware would not be allowed to connect to the power grid until those service agreements are approved and the new rate structure is in place.
Additionally, the Public Service Commission would be required to evaluate whether rate applications for these facilities could unfairly impact costs for other customers, threaten power grid reliability, or undermine Delaware's renewable energy and emissions reduction goals.
The other bill that aims to protect Delaware ratepayers from the aforementioned risks is HB 445, which would require large energy-use facilities to produce or procure new sources of energy.
Specifically, lawmakers say the bill would require data centers and other facilities that can't initially generate enough power for their needs to submit a plan demonstrating how they will gradually increase energy production. They will then have to produce or procure enough new energy to meet 100% of their needs within 10 years of the start of operations.
Lawmakers say that these bills together will help ensure any data center opened in the First State will pay its fair share of utilities.
Again, both measures are now headed to the Senate for consideration.
