Boscola introduces consumer protection package for data centers

(The Center Square) – When it comes to the energy expenditure the state is expecting to absorb thanks to the massive growth of data centers, several plans have been floated.

They include tapping into the state’s natural gas reserves in the Marcellus shale, fast-tracking renewable energy projects, and negotiating with the state’s power suppliers and grid operators.

Slowing the expansion, it would seem, isn’t among the options. That’s why Sen. Lisa Boscola, D-Bethlehem, is introducing a package of six bills to protect consumers from data center fallout.

“This package provides a balanced, reasonable framework to ensure that data center development does not raise electric bills or overwhelm local communities,” wrote Boscola in a memo introducing the package.

A key concern with onboarding new data centers onto the state’s power grid is the upgrades that are often required to sustain them. Just like other industries, when expenses go up, prices tend to follow with costs being passed on to consumers. The first bill in Boscola’s package, the Data Center Cost Responsibility Act, is aimed at preventing that scenario. The bill would prohibit charging residents and businesses for those upgrades while requiring approval from the Pennsylvania Utilities Commission for “all large-load service agreements.”

Consumers would get an additional boost from bill credits. A second bill would require data centers to pay a fee per MWh.

A third bill, the Priority Power Act, would require the onboarding of large-load projects to either be delayed or conducted incrementally when necessary so as not to impact existing customers. The act suggests this prioritization would apply to both cost and availability of electricity. An additional bill would require large centers to either develop or participate in demand response programs.

A bill that, on the surface, would seem to contrast with Gov. Josh Shapiro’s “Lightning Plan” to centralize and streamline major project development, would change the Municipalities Planning Code to “strengthen local authority over large data center siting.”

The proposed legislation “Requires disclosure of projected water use and infrastructure impacts, allows municipalities to consider water capacity and affordability during review, classifies large data centers as industrial uses, authorizes enforceable noise standards including low-frequency sound, and confirms municipal authority to impose setbacks, buffering, visual mitigation, and site-specific conditions.”

Organizers have long asserted that local environmental concerns are ignored in order to prioritize large projects with high economic impact. When it comes to energy, industry advocates say they are subject to high levels of public scrutiny and process before they’re permitted to build.

New policy from the Department of Environmental Protection on the topic of environmental justice zones emphasizes community education and engagement, though industry leaders have argued that the criteria for environmental justice zones are subjective and misleading. Nonetheless, data centers are often built in areas that already have significant industrial activity, making communities more likely to be environmental justice zones subject to the cumulative effects of industry and transportation.

A final bill prohibits utilities companies from passing on the cost of paying above-market electricity purchased from data center sites where electricity is generated independently. Some centers employ diesel, gas, solar, or wind generators to offset or back up their energy demand, while notably two nuclear plants in Pennsylvania have been enlisted for the task. The promise of small modular reactors may open up additional doors for on-site energy generation in the future.

“Together, these proposals form a responsible path forward for data center growth in Pennsylvania,” wrote Boscola of the bills. The package awaits specific language and co-sponsors.