DOVER – Continuing efforts to address rising energy costs in the First State, the House passed two bills Tuesday to protect energy reliability while ensuring the costs associated with large energy-intensive facilities, like data centers, are not shifted onto Delaware families and small businesses.
Substitute 1 for House Bill 233, sponsored by Rep. Frank Burns and Sen. Stephanie Hansen, would establish a comprehensive framework to protect Delaware ratepayers from the costs associated with large energy-use facilities, such as data centers.
“Delaware is a small state, and every decision we make regarding our energy grid can have huge effects on residents,” said Rep. Frank Burns.
“We have heard from our neighbors in other states how much data centers have hurt their communities, and how often the costs trickle down to ratepayers,” said Rep. Frank Burns.
“Delawareans should not bear the burden of massive data centers coming into our small state, and siphoning energy from our already limited supply.”
Under the bill, large energy-use facilities would be required to fully bear the costs of any new transmission or distribution infrastructure needed to serve them, as well as any increased capacity market costs they create. Those costs could not be shifted onto residential customers, small businesses, or other ratepayers.
To accomplish this, the legislation would require Public Service Commission-regulated utilities, including Delmarva Power, to establish a separate rate structure for large energy-use facilities. These facilities would also be required to enter into electric service and transmission service agreements meant to protect existing customers from any future cost shifts. A large energy-use facility could not connect to the electric grid until those agreements are approved and the new rate structure is in place.
The bill would also require the Public Service Commission to evaluate whether rate applications for large energy-use facilities could unfairly increase costs for other customers, threaten grid reliability, or undermine Delaware’s renewable energy and emissions reduction goals.
In total, Delaware electric customers use roughly 11.3 million megawatt hours (MWh) of electricity a year. Just one of the proposed data centers would consume 8.7 million MWh of power in the same time period.
The increased strain on Delaware’s electric grid would create several risks for consumers, including rising energy prices due to scarcity, potential energy shortages, and costly upgrades to our electric grid infrastructure.
Recognizing the immense energy demands and their risk on Delaware consumers, HB 445, sponsored by Rep. Debra Heffernan and Sen. Stephanie Hansen, would require large energy use facilities to produce or procure new energy to power their operations.
The bill would require large energy-use facilities that can’t initially generate enough power to meet their own needs to submit a plan demonstrating how they will gradually increase energy production. Those facilities would also be required to produce or procure enough new energy to meet 100% of their annual electricity needs within 10 years of beginning operations.
“Delaware ratepayers should not be expected to subsidize the energy demands of massive data centers. We know these facilities consume vast amounts of power and can create real problems for grid reliability and affordability,” said Rep. Debra Heffernan.
“This legislation ensures that any data center choosing to locate here will be responsible for developing the generation needed to support its operations, which will reduce pressure on the grid and help prevent future cost increases for Delaware families and businesses.”
Together, both HB 233 (S) and HB 445 would protect Delaware ratepayers and help to ensure that any data center that chooses to locate in our state pays its fair share.
“As data center development continues in our region, we owe it to our constituents to ensure that potential development in our state happens responsibly, and not on the backs of Delaware ratepayers,” said Senator Stephanie Hansen.
“Together, these bills implement a regulatory process and strong guardrails on data center development that will shield consumers from cost-shifting, thus protecting ratepayers from burdensome energy costs. These bills effectively thread the needle between economic development and our top priority: ratepayer protection.”
Both measures now head to the Senate for consideration.
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