Why Delmarva Power wants to tariff large energy users like data centers

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Delmarva Power and Light is proposing new rates for “large load electric customers” in its coverage area.

Delaware‘s largest power company, whose coverage area reaches throughout the Eastern Shore and other parts of Maryland, said it proposed a new tariff to the Delaware Public Service Commission on Dec. 19. The proposed rates would apply to customers who use more than 25 megawatts of energy and mandate comprehensive studies to analyze the collective impact of large projects on the grid. The proposal would require even greater detailed energy-use projections, and it would lock in financial guarantees of large energy users for 10 years, the company said.

“The company is committed to safely and reliably delivering energy service, supporting the growing Delaware economy and managing large load interconnections in a way that protects other customers from financial impacts,” Delmarva said in a statement Dec. 19.

It’s up to the Public Service Commission to approve the tariff, and it has already paused all major interconnections, like large data centers, until they figure out a large load tariff. If it gets approved, it would apply to all of Delmarva’s territory in Delaware.

“We look forward to supporting the Public Service Commission’s review and decision on this filing over the coming months,” Delmarva said in the Dec. 19 statement.

The proposal is in line with Gov. Matt Meyer’s priorities for data centers, which have been popping up all over the country, including in Delaware’s electrical grid. Delmarva is just one part of the PJM interconnection grid, which includes 13 states and Washington, D.C. Whatever happens on other parts of the grid affects your power and your bills.

Meyer wants Delaware to be an active participant in the data center economy, especially as artificial intelligence becomes more popular, but wants to do it without residents’ picking up the tab for energy and water-hungry data centers.

A tariff like this one, where large users pay at a different rate than residential and small users, is a way to level that playing field. It’s not unheard of either; a power company in Missouri approved a large load tariff on developments that use at least 75 megawatts of power.

Delaware and Delmarva Power have a ticking clock to lock in their regulations. Data centers have been proposed in Delaware City and Newark.

The Delaware City proposal, Project Washington, would have 6 million square feet of data center. It promises job creation, especially during its construction phase. A statement from the Public Service Commission from earlier this year said the project could use around 1,200 megawatts at full capacity.

That project has caused residents and county officials to pay attention, and data center zoning regulations are being discussed in the New Castle County Council in 2026.

The Newark project is still in its infancy of the approval process.

Shane Brennan covers Wilmington and other Delaware issues for Delaware News Journal.