States Contend With The Proliferation Of Data Centers Across The East Coast

As data center projects proliferate in the United States to meet the growing demands of IT housing infrastructure, particularly in the face of rising AI usage, energy demands rise (and are expected to continue to grow), but so do the potential investments. Data centers are particularly energy-hungry, and the states are responding.

In Pennsylvania, Senate Bill No. 939 (the Artificial Intelligence and Data Center Act) was introduced on July 14, 2025. The Artificial Intelligence and Data Center Act establishes a state Office of Transformation and Opportunity and creates a regulatory sandbox program to allow for testing of data centers and high-impact data centers (a data center with a critical IT load of 50 MW or higher). If approved, tech companies would be able to temporarily test AI and data center technology with fewer approvals through fast-tracked permitting and the promise to keep municipal governments at bay on imposing strict local guidelines. Senate Bill No. 939 is currently with the Pennsylvania Senate Communications & Technology Committee.

In Delaware, Senate Bill 205 was introduced in late September to require any person or entity to begin the business of using 30 MW or greater of electricity to first obtain a Certificate to Operate (COP) from the Delaware Public Service Commission (DE PSC). On October 15, 2025, on the heels of Senate Bill 205 in Delaware, the DE PSC approved an order to open a docket to "address concerns regarding increased electric transmission and distribution costs to existing ratepayers and reliability concerns... namely for customers that will use a monthly maximum demand of 25 MW or greater" in the Delmarva Power & Light service territory and noted that these customers "need to be treated as a separate class within the current rate structure..." Docket No. 25-0826, Order No. 10826 (Oct. 15, 2025). Until a tariff is in place, interconnection of any large load customers will be paused.

In the same DE PSC meeting where Order No. 10826 was approved, the DE PSC noted the issue of data centers requiring a tremendous amount of power, while the rate of growth for new generation is relatively slow due to supply chain constraints, logistics and permitting. The DE PSC recognized that centers in the PJM footprint, even Virginia, could and likely would impact the state of Delaware. Senate Bill 205 awaits consideration by the Senate Environment, Energy & Transportation Committee.

On October 24, 2025, a New York State Bill (Senate Bill S8546) was introduced that would require the Public Service Commission (NY PSC) to establish a grid modernization surcharge on utilities for energy use of data centers. A data center would be considered any IT load exceeding 10 MW of demand. A high-intensity data center would mean a data center with an annual power-usage effectiveness greater than 1.3 or an annual electricity consumption greater than 50 gigawatt-hours. The surcharges would be put into a "grid modernization fund." If Senate Bill S8546 were to go through, the NY PSC would then likely open a docket to establish specifics as to the surcharge and its application.

Meanwhile, in New Jersey, Governor Phil Murphy conditionally vetoed legislation, S-2493, on October 20, 2025, that would require the owners or operators of data centers to submit water and energy usage to the New Jersey Board of Public Utilities (BPU). Disagreement ensues on the potential delay of the bill, where reporting would have originally been required within six months of the bill's signing. The governor's conditional veto would extend the required reports to January 2027. Instead, the governor recommended that the New Jersey Legislature amend an existing law (P.L.2025, c.98), which directs the BPU to study the data centers' effects on electricity costs for New Jersey residents and evaluate the potential for a tariff. On the reporting requirements of S-2493, the governor suggested deferring to the BPU to decide whether such reporting would be necessary in the future.