State ratepayer advocates from five states told the Federal Energy Regulatory Commission on July 17, 2026 that the agency's effort to create a framework for data centers connecting to the grid in the PJM Interconnection fails to adequately protect consumers from data center-driven transmission costs. The advocates argue that FERC's "show cause" order issued to PJM and five other grid operators last month is flawed because it doesn't address the cost allocation of network upgrade costs caused by data centers, according to filings at the agency on Friday.
The ratepayer advocates from Delaware, Illinois, Maryland, Ohio, and Pennsylvania focused their criticism on how existing consumers could be left paying for transmission infrastructure needed to serve data centers. FERC issued its show cause order in late June, giving PJM and other major grid operators 60 days to respond—though they can request 90-day extensions within 45 days. The advocates asked FERC to respond as quickly as possible, noting that every network upgrade added to a transmission owner's revenue requirement while these questions remain open embeds another cost shift.
The ratepayer advocates from Delaware, Illinois, Maryland, and Ohio said "it is arbitrary and capricious and contrary to the Federal Power Act" for FERC to conclude it has a duty to address the risk of cost shifting among transmission customers while failing to remedy the actual cost shifts the PJM tariff guarantees due to network upgrades for large loads. Pennsylvania's ratepayer advocate added that unjust and unreasonable wholesale transmission cost shifts from large loads in PJM can manifest through unjust cost allocation of both Regional Transmission Expansion Plan projects and supplemental projects, not just by speculative large loads failing to pay their existing share under existing cost allocation methods. The advocates noted that states have a limited ability to "sub-allocate" transmission costs to specific customers, in part because some PJM zones cross state borders.
The core issue is that even when data centers sign cost-recovery agreements with transmission providers, PJM's regional cost allocation rules may still cause cost shifts to other consumers. The advocates asked FERC to clarify that cost-recovery agreements are just and reasonable only if they require the customer to pay the full cost of the network upgrades needed to accommodate the large load. FERC failed to "consider how the PJM tariff confines states to incomplete protection," the Delaware, Illinois, Maryland, and Ohio advocates said. PJM runs the grid and wholesale power markets in 13 Mid-Atlantic and Midwestern states and in the District of Columbia, making the cost allocation question particularly complex across multiple jurisdictions.
The advocates' message is clear: each cost-recovery agreement negotiated against an unsettled standard invites disputes that FERC could resolve today. Without quick action from the commission to clarify who pays for data center infrastructure, existing electricity customers face the prospect of subsidizing the massive transmission buildout needed to power the data center boom.