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The people’s counsel asked the Federal Energy Regulatory Commission (FERC) to fast track a complaint filed in May that asked for transmission expansion costs driven by data center load increases to be revisited.

The agency also said Maryland ratepayers might be responsible for an additional $5.4 billion in capital costs for transmission projects built between 2031 and 2035.

“Absent commission action, there is no relief in sight for Maryland ratepayers,” the Maryland people’s counsel said.

FERC has yet to rule. PJM and its transmission owners asked for dismissal of the case.

The last three “windows” of PJM regional transmission expansion planning resulted in projects that would spread $22 billion in expenses among the 13 states in the grid, with $2 billion allocated to Maryland. The people’s counsel asked for the process to be restudied.

PJM uses a hybrid approach to allocate the costs of certain high-voltage, regional transmission projects selected through the process. Half of the costs are allocated using the load ratio share methodology and the other half according to the distribution factor method.

Relying more on the former and less on the latter could continue to even out the cost contributions required of states seeing less load growth, according to comments by the Rocky Mountain Institute, a think tank known for its work on energy efficiency.

“Neither metric on its own, nor the use of the two metrics together, successfully measures benefits that accrue to load serving entities serving data centers,” according to the Sierra Club, which also commented in the docket.

The group also said FERC must establish a replacement rate through a remedial process.

The Maryland people’s counsel recommended a replacement rate that would recognize the inherent differences in terms of upgrade cost magnitude driven by large loads, and the inherent uncertainty in these load requests.

Those costs should be appropriately allocated to the zones in which the data center large loads are located and which drive transmission costs.

The peoples’ counsel also asked for a refund procedure for ratepayers.

The Data Center Coalition, an industry group, responded that the people’s counsel wants FERC to discard the hybrid cost allocation methodology based on the theory that any transmission upgrade that has any nexus to data center load growth should be treated as if it solely benefits those data centers.

The coalition said the approach of the people’s counsel “is premised on an unduly narrow view of the benefits of high-voltage transmission facilities that cannot be squared with decades of commission precedent.”

In its response, PJM said that FERC has already viewed the hybrid method as striking the appropriate balance between recognizing widespread regional benefits and identifiable benefits over time.

If FERC finds that the hybrid method is unjust and unreasonable, PJM asked that rate modifications be made prospective from the date of a commission order adopting a replacement rate only.

The PJM transmission owners rejected a proposed replacement rate and said that recent large load growth has not proven transmission allocation methods to be unjust or unreasonable.

The replacement rate proposal is inconsistent with FERC’s June 18 order in Docket EL26-67-000 on integrating new large loads, the transmission companies said.

This order found that that PJM’s existing open access transmission tariff appears to be unjust under section 206 of the Federal Power Act.

PJM was obliged in that order to show cause within 60 days why several aspects of its tariff remain just. FERC also directed PJM to file a report on how it intends to ensure that adequate generation will be available to serve existing and new large loads.

“The proceeding initiated by the large load order will address the issues raised in the complaint,” the transmission owners said. “The large load order sets principles for the replacement rate … that conflict with the people’s counsel proposed replacement rate.”

Other intervenors also asked that that any PJM transmission tariff revisions be considered in large load order docket.

Some State Agencies Side with Maryland

“Any claim … that Maryland customers do not cause the costs allocated under the hybrid allocation methodology commensurate with benefits received is unsupported by longstanding precedent,” the transmission owners said.

Several state agencies appear to view transmission costs in the same way as the Maryland people’s counsel.

The Ohio consumers’ counsel said FERC should grant the complaint of the Maryland agency and direct PJM to implement a revised tariff that allocates large data center load-driven transmission costs to those customers.

FERC should stop the unreasonable imposition of the billions in new transmission investment for large data center loads on existing consumers who pay for costs they did not cause and from which they do not benefit, the Ohio consumers’ counsel said.

The New Jersey Board of Public Utilities said that PJM’s “cost allocation status quo results in a level of socialization that is incompatible with the cost-causation principle” and undermines retail regulators’ ability to assign costs to the economic actors that are causing them.

The Pennsylvania Office of Consumer Advocate proposed an expansion rate for supplemental projects that would allow transmission owners to recover capital costs and data centers to pay a separate rate for network upgrades.

“That FERC may not be willing to review cost allocation raises questions over the meaning of the Ratepayer Protection Pledges announced on March 4 by the White House,” the Pennsylvania office said.

In the pledge, companies agree to protect American consumers from price hikes due to data center energy and infrastructure requirement.

The Virginia Consumer Counsel said it would support exploring mechanisms to directly allocate baseline transmission costs to cost-causing customers where the facts support such treatment.

Democrats in Maryland’s congressional delegation said that because most of the transmission expansion costs have not yet appeared on customer bills, timely FERC action can prevent much harm before it occurs.

Thirteen Maryland state senators and 67 state representatives said that their constituents are disproportionately affected because they sit next to “data center alley” in Virginia, which houses the world’s largest concentration of hyperscale data centers.

Old Dominion Electric Cooperative, a generation and transmission company in Virginia, and Northern Virginia Electric Cooperative, a distribution company serving many data centers, asked for dismissal of the case.

In the same docket, the Maryland Energy Administration and public service commission, along with the people’s counsel, asked FERC to revisit the return on equity of transmission companies.

Each respondent currently receives a 50-basis point incentive adder within its return on equity for its participation in a regional transmission organization (RTO), the agencies said, but FERC does not grant the adder when participation in a transmission organization is mandated.

“The commission should find that inclusion of the RTO adder in respondents’ rates is unjust and unreasonable,” they said, and come up with a replacement rate.