The market for data center development has already changed dramatically since the legislature enacted the Computer Data Center Sales and Use Tax Exemption Program in 2021. America’s tech titans have entered an arms race to develop data centers that require enormous amounts of electricity and water, spurring a development frenzy in places like Pennsylvania with a diverse portfolio of non-intermittent and clean energy resources.

There is no question that the AI arms race is single-handedly creating an energy grid crisis for our nation and Commonwealth. PJM expects a load growth of 32 gigawatts with 30 of that coming from data centers alone in the next 5 years. This significant increase in demand is coming quickly and has triggered an energy capacity crisis resulting in the highest cost PJM capacity auctions we have ever seen.

The cost of these auctions is being passed onto residents as PECO and other utilities in Pennsylvania have filed continual rate increases. Most recently, PECO increased rates by 12.6% after last year’s auction and is expected to file for a rate increase after this year’s.

To keep costs down for all, we need new energy generation – especially the cheapest kind of electricity generation, which is solar. Pennsylvania needs to align its incentives for data center development with a goal to fight rising electricity price by focusing incentives on energy efficiency and cheaper, clean energy generation.

My legislation would amend our existing tax exemption for data centers to require them to have purchased 100% of their energy from Tier 1 alternative energy sources and have invested in energy efficiency by 2030 to qualify for the exemption. Ensuring that these large load users take actionable steps to increase their energy efficiency will reduce the burden that our constituents continue to bear.

Please join me in sponsoring this legislation to mitigate the increasing costs of electricity our constituents are facing at the hands of data centers.