New Pennsylvania Law Aims to Protect Ratepayers from Speculative Data Center Demand

When Pennsylvania’s Public Utility Commission reviewed utility load forecasts earlier this year, one number stood out: PPL Electric projected its electricity demand would surge by more than 200% over the next nine years. The next closest utility? Just 11%.

As data centers race to build across Pennsylvania and the broader PJM Interconnection region, utilities are placing massive bets on how much power these facilities will actually use. And when those bets are wrong, ratepayers foot the bill. In response, Representative Danilo Burgos championed the Load Forecast Accountability Act, which was signed into law in November 2025.

The $9 Billion Problem

The consequences of speculative forecasting are already hitting electric bills. In PJM’s 2025/2026 capacity auction, prices exploded from $28.92 per megawatt-day to $269.92, a nearly tenfold increase that added $14.7 billion in costs compared to the previous year.

According to Monitoring Analytics, PJM’s independent market monitor, data centers were responsible for 63% of that price spike, or roughly $9.3 billion.

Residential customers are already feeling the impact. In Washington, D.C., Pepco customers saw bills increase by an average of $21 per month, with half of that increase directly tied to capacity market costs. Maryland and Ohio saw residential bills jump by an estimated $18 and $16 per month, respectively.

The problem isn’t just rising prices: it’s rising prices based on load growth that may never materialize. As Monitoring Analytics noted, the “extreme uncertainty” in data center forecasts is unprecedented. Consider Ohio: American Electric Power recently slashed its data center pipeline by more than half, cutting projections from 30 GW to just 13 GW. Many projects that utilities counted on never moved past preliminary discussions. Yet ratepayers across PJM had already paid higher capacity prices based on those inflated forecasts.

Pennsylvania faces similar risks. PPL Electric testified at an April 2025 PUC hearing that it has “requests in advanced stages” exceeding 9 gigawatts of new load, more than doubling the utility’s current 7.5 gigawatt summer peak within just five to six years. But how many of those “requests” will become operational data centers?

What the New Law Does

The Load Forecast Accountability Act gives Pennsylvania’s PUC three critical powers:

Review and validation authority: Before utilities submit load forecasts to PJM, the PUC will review them for accuracy and reasonableness. This creates a state-level checkpoint before utility projections push regional capacity prices higher.

Coordination power: The PUC will work with PJM and regulators in other states, such as New Jersey, Maryland, and Virginia, to prevent the same data center project from being counted multiple times across different utility territories. This “duplicative counting” problem has plagued regional forecasting as data centers shop around for the best deals.

Access to confidential information: Previously, utilities could cite confidential agreements with data center customers to justify load projections, with limited regulatory oversight.

The new law gives the PUC access to these contracts to verify that projected load growth is backed by actual commitments, not just preliminary discussions.

The law also requires annual reporting on load forecasting methodology, creating ongoing transparency rather than one-time reviews.

Representative Burgos described the legislation as essential to “ensuring transparency, accountability and consumer protection” as Pennsylvania’s energy landscape rapidly evolves.

A Piece of the Puzzle

The Load Forecast Accountability Act is part of a broader legislative push in Pennsylvania to responsibly manage data center growth. It complements HB 1834, which focuses on protecting grid reliability and ratepayers, and on ensuring that data centers bear financial and renewable-energy obligations, as well as numerous other bills proposed in the last two months addressing everything from water usage to prevailing wages for data center construction.

The PUC has moved in parallel, voting 3-2 in November 2025 to advance a model tariff for large-load customers that would “guide how large electric customers connect to the grid and share costs responsibly.”

Of course, the new law won’t solve everything. It doesn’t directly allocate infrastructure costs between new and existing customers, and it won’t clear the massive interconnection queue backlog that’s delaying new generation projects.

But better forecasting means better planning. Now that utilities must validate their projections with state regulators before submitting them to PJM, ratepayers are less likely to pay billions for infrastructure that serves ghost data centers. As Representative Burgos said, “By enhancing oversight, we can protect ratepayers while strengthening reliability.”