The Pennsylvania Public Utility Commission voted unanimously Thursday to approve two motions that could reshape how data centers are charged for electricity and how utilities manage emergency power shortages in the state. The commission's action comes after a PUC report in August projected industrial electricity demand will surge 18.56% over the next five years, driven primarily by PPL Electric Utilities Corp.'s large-load forecast, even as overall electricity use fell from 2024 to 2025.

One motion directs PUC staff to propose updates to the state's rules for emergency curtailment and to organize a technical conference on cost allocation for data centers this fall. The other sets in motion the creation of a working group to examine potential improvements to the commission's ratemaking processes with a focus on transparency and affordability. PJM Interconnection's July 2026 capacity auction identified a system-wide reliability shortfall of 6,831 megawatts for the 2028-29 delivery year, the commission said. The PUC's Law Bureau and Bureau of Technical Utility Services will present a tentative order outlining proposed changes to the state's load management framework at the commission's Oct. 1 meeting, with a potential final vote scheduled for Jan. 28 if the order is approved for public comment.

"The combination of rapid load growth and tightening resource adequacy conditions requires us to carefully examine whether our existing regulatory framework is sufficient for the challenges ahead," PUC Vice Chair Kimberly Barrow said in a Thursday release. The August report called the impact from data centers and other large loads "significant" and warned that "an insufficient level of construction of electric generation and continued retirement of base load electric generation" is creating the need for stakeholders to work together to ensure reliable operation of the bulk electric system. The commission said the rapidly changing landscape for utility costs, including data center development as well as inflation and infrastructure needs, has "increased pressure on utility costs and contributed to a significant number of proposed rate increases."

The Ratemaking Working Group will consider whether return on equity issues could be addressed through periodic, sector-specific cost-of-capital proceedings rather than litigated separately in individual utility rate cases, according to the PUC. It'll also examine ways to improve transparency in rate cases around issues including ROE, and whether the ROE used for Distribution System Improvement Charges could be calculated in a more formula-based way. The group will be managed by the PUC's Office of Executive Director and include representatives from consumer and small business advocates, utilities, state government and the General Assembly, industrial energy consumers, low-income advocates and other stakeholders. After the commission publishes an order formally establishing the group in the Pennsylvania Bulletin, designated stakeholder groups will have 30 days to submit nominations, with full membership announced 15 days after that. The technical conference this fall will give utilities, consumer advocates, large-load customers and other stakeholders an opportunity to examine how costs associated with large new loads are identified and allocated, including potential impacts on customers who aren't contributing to that new demand.