Across the country, demand from data centers are pushing electric grids into new territory. The big question regulators keep running into: Who pays for the power?

In Delaware, that question is playing out right now at the state’s Public Service Commission, a governor-appointed board that regulates utilities. The case, known as PSC Docket No. 25-0826, is at the comment stage, where utility companies and state agencies offer evidence before commissioners issue a decision.

At stake is a proposal to create a new “large load” tariff — a new rate category — for energy customers drawing 25 megawatts (MW) or more of electricity. 

Hyperscale data centers often clock well above that. The proposed Project Washington in Delaware City, for example, would draw 1,200 MW, according to public filings and testimony. Similar ratepayer protection debates are playing out nationwide, including in Pennsylvania and recent federal policy remarks.

At a recent public comment session about this proposal, people kept returning to the same set of concerns, asking:

  • How much total electricity demand is being contemplated across projects?
  • How are grid upgrade costs being modeled and allocated?
  • What safeguards apply if a project scales back or goes bankrupt?
  • How much of the analysis behind the tariff is publicly accessible?

The tone was largely cautious rather than confrontational. Most speakers expressed concern about Delmarva shaping the terms of the tariff itself, and urged stronger safeguards to protect ratepayers. Union representatives, by contrast, supported moving the proposal forward and lifting the current pause on new large-load hookups.

Read on for more about what the tariff means, what exactly Delmarva is proposing, where the case goes next and how residents can add their voice to the record.

What exactly is a ‘large load’ tariff?

When you hear “tariff,” you might think of trade policy, especially if you’ve been following the news lately. In utility regulation, a tariff is different: It’s the official schedule of rates, terms and conditions under which electric service is provided. Once approved, it directly shapes how customers are billed.

A “large load” tariff is a specialized rate category for customers whose electricity demand is big enough to materially affect the grid.

The PSC case at hand is about a proposal by Delmarva Power & Light, which serves more than 530,000 customers in Delaware and Maryland. The utility provider is proposing new tariff provisions for customers with peak demand of 25 MW or greater, though it has also recommended raising that threshold to 50 MW.

The proposal defines:

  • What qualifies as a “large load” customer
  • What upfront financial commitments are required
  • How grid upgrade costs are assigned
  • What contract terms apply if a project scales back or withdraws

At its core, the question is whether the protections in Docket No. 25-0826 are strong enough to prevent the major infrastructure cost burden from landing on existing residential and small-business customers.

How much energy is 25 MW? What about 1,200 MW?

A megawatt measures how much power is being used at a given moment; 25 MW is the entry point for the proposed tariff. 

That is roughly equivalent to the average demand of a city of about 20,000 to 25,000 people, using Delaware’s annual electricity use divided by population to estimate.

At the upper end of what’s referenced in this docket is the 1,200 MW Project Washington. (DNREC denied the project’s Coastal Zone permit earlier this year; the developer has appealed.) It would use electricity approximately equivalent to more than 2.5 times Delaware’s entire population.

Why can increased demand raise electricity costs?

Large new electricity demand can reshape how the grid is priced and built.

Electric bills generally include a supply charge (the cost of generating power) and a delivery charge (the cost of maintaining poles, wires and substations). A major new load can influence both.

On the supply side, prices in the regional wholesale market, run by PJM Interconnection, can rise when demand increases, especially if the system is tight. Higher wholesale prices can have an impact on customer bills.

On the delivery side, serving a very large customer may require new substations, transmission upgrades or other infrastructure projects that can cost millions of dollars or more. The issue at hand is who bears those costs: the new large customer driving the upgrades, or existing ratepayers through future bills. 

What to know about the grid

PJM Interconnection (originally the Pennsylvania-New Jersey-Maryland Interconnection), which Delaware is part of, is the regional grid operator that manages the high-voltage power system and wholesale electricity markets across 13 states and the District of Columbia.

PJM runs regional power markets, plans high-voltage transmission projects and manages congestion pricing, which is the added costs that can show up when parts of the grid get crowded.

When a new large load connects to Delmarva’s system, the impact doesn’t stop at state lines. It can influence grid planning and market outcomes across the broader PJM region. That’s one reason regulators in this case are closely examining the utility’s demand forecasts and long-term agreements that would lock in service for large customers.

What the state wants to know about the tariff proposal 

In formal written data requests filed in the docket, state agencies and other parties posed detailed technical questions to Delmarva.

In its first set of written questions, the Delaware Department of Natural Resources and Environmental Control (DNREC) asked Delmarva to show its math.

Specifically, the agency asked how the company calculated potential grid congestion and changes in wholesale electricity prices; how transmission upgrade costs would be assigned; what assumptions were used to estimate roughly 2,455 megawatts of proposed new demand; and to provide the spreadsheets supporting those projections.

The Division of the Public Advocate (DPA) and Commission Staff submitted additional written questions addressing cost recovery, financial protections if a project scales back or defaults, and the structure of long-term transmission service agreements.

A catch: The public can read these questions, but not necessarily the detailed answers or the spreadsheets behind them

On Feb. 6, Delmarva filed certificates of service stating that its responses were uploaded to eBridge — the PSC’s internal electronic filing and service system used by official parties in a case. They’re not available on DelaFile, so Technical.ly has submitted a Freedom of Information Act (FOIA) request seeking these documents. We will report on what those materials show if and when they are produced.

What happens next

Written public comments on the proposed tariff are now accepted through April 6, an extension of the original March 6 deadline. (Delmarva is required to file a final version of the tariff on April 27.)

The case then moves into its formal phase, with a hearing examiner expected to issue findings this summer before the full commission deliberates.

Residents can submit written comments through PSC’s system by referencing Docket No. 25-0826.

Meanwhile, related processes continue, including PJM’s regional grid studies, environmental and land-use reviews for individual projects and legislative proposals such as House Bill 233, which would require utilities to create a distinct rate class for facilities using 20 MW or more.