Report Raises Alarm Over $4.4B Data Center Transmission Upgrade Costs
A report has raised concerns about the $4.4 billion in transmission upgrade costs approved in 2021 across seven PJM Interconnection states. These upgrades were necessary to bring data centers online, but the responsibility and involvement of specific companies or customers remain unclear.
The report highlights the lack of specific assignment of these costs to data center customers. Currently, all utility customers within a utility's footprint share these costs. It recommends four actions to address this issue, including requiring specific customers to pay for the transmission costs they cause and tracking these costs in rate-setting processes.
In 2023, about $4.4 billion in transmission projects were approved, with nearly half the costs in Virginia. Over 150 local transmission projects to serve data centers were initiated from 2022 to 2024 in these seven states. Similar costs are expected for data centers in 2024.
The report calls for increased oversight and specific assignment of transmission costs to data center customers. This change aims to ensure fairness and transparency in the distribution of these expenses, which are expected to continue in the coming years.
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