AN ACT TO AMEND TITLE 26 OF THE DELAWARE CODE RELATING TO LARGE ENERGY USE FACILITIES.

Legislation Document

SPONSOR:

Rep. Burns & Sen. Hansen & Rep. Heffernan & Rep. Minor-Brown

Reps. Romer, Phillips, Gorman, Snyder-Hall; Sen. Sturgeon

HOUSE OF REPRESENTATIVES

153rd GENERAL ASSEMBLY

HOUSE BILL NO. 233

AN ACT TO AMEND TITLE 26 OF THE DELAWARE CODE RELATING TO LARGE ENERGY USE FACILITIES.

WHEREAS, the proliferation of data centers is a direct response to the escalating demand for digital services, largely driven by advancements in artificial intelligence, the digitization of various industries, and the increasing reliance on cloud-based services; and

WHEREAS, the rapid growth of data centers, particularly here in Delaware and other states also connected to the PJM grid, is significantly increasing electricity demand and poses a challenge to grid stability; and

WHEREAS, data centers are energy-intensive by nature, operating continuously to ensure uninterrupted service with a single large facility consuming as much energy annually as approximately 350,000 to 400,000 electric vehicles, according to Forbes; and

WHEREAS, states and utilities are implementing strategies, including infrastructure investments and diversifying energy sources, to address the rising energy needs of data centers; and

WHEREAS, the costs associated with expanding energy infrastructure to support large-scale data centers may ultimately fall on ratepayers, prompting concerns about rising utility bills; and

WHEREAS, the inevitable and costly upgrades to electric grid infrastructure demand timely action to ensure that the financial burden of increased energy consumption by large-load customers is not unfairly shifted onto residential and small businesses customers through rate increases.

NOW, THEREFORE:

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Subchapter I, Chapter 1, Title 26 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows and redesignating accordingly:

§ 102. Definitions.

As used in this title, unless the context otherwise requires:

(7) “Large energy use facility” means a facility that uses or is able to use 20 megawatts or more and is primarily engaged in providing a service described under code 518210 of the 2022 North American Industry Classification System.

Section 2. Amend Subchapter III, Chapter 1, Title 26 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 316. Rates for large energy use facilities.

(a) Commission-regulated utilities shall establish a classification of service for retail electricity consumers that are large energy use facilities. The classification of service must be separate and distinct from classifications of service for other commercial or industrial retail electricity consumers and have its own tariff schedule. Any rate schedule adopted by the Commission for the class must:

(1) Allocate the costs of serving the class of retail electricity consumers that are large energy use facilities to the class in a manner that is equal or proportional to the costs of serving the class or directly assign the costs of serving a retail electricity consumer that is a large energy use facility to the retail electricity consumer.

(2) Mitigate the risk of other classes of retail electricity consumers paying unwarranted costs.

(3) Mitigate the risk of shifting the costs, in an unwarranted manner, of serving a retail electricity consumer that is a large energy use facility to other classes of retail electricity consumers, including costs of an electric utility to meet load requirements resulting from the provision of electricity service to a retail electricity consumer that is a large energy use facility.

(4) Mitigate the risk of jeopardizing grid reliability in the State of Delaware and the PJM region.

(b) In deciding whether to approve a proposed rate schedule of a regulated electric utility for a classification of service described under subsection (a) of this section, the Commission shall examine whether the rates:

(1) Result in, or have the potential to result in, increased costs or unwarranted risk to other retail electricity consumers.

(2) Provide for equitable contributions to grid efficiency, reliability, and resiliency benefits.

(3) Impede the electric utility’s ability to meet renewable energy targets under § 354 of this title or reduce the emissions of greenhouse gases consistent with state policy, including § 10003 of Title 7.

(4) Allow for procurement of, or contracts for, generation resources that support the electric utility’s ability to meet renewable energy targets under § 354 of this title or reduce the emissions of greenhouse gases consistent with state policy, including § 10003 of Title 7.

(5) Meet any other conditions the commission may require in the public interest.

Section

3. This Act takes effect upon enactment. Regulated electric utilities must file an application to establish the rates required under this Act within 180 days of the effective date.

SYNOPSIS

This Act requires regulated utilities to establish a separate rate for large energy-use facilities that mitigates the risk of costs associated with expanding infrastructure and maintaining reliability in the face of growing demand from being shifted to residential, small business, and other electric customers. The Public Service Commission will consider the following factors in determining whether to approve a rate application:

1. Whether the rates have the potential to result in increased rates or unwarranted risk to other retail electricity customers.

2. Whether the rates will provide for equitable contributions to grid efficiency, reliability, and resiliency.

3. Whether the rates will impede the utility’s ability to meet renewable energy targets and reduce greenhouse gases consistent with state policy.

4. Whether the rates will allow for procurement of, or contracts for, generation resources that support the electric utility’s ability to meet renewable energy targets and reduce emissions of greenhouse gases consistent with state policy.

5. Meet any other conditions required by the Commission in the public interest.

This Act takes effect upon enactment and regulated utilities must file an application to establish rates required under this Act within 180 days of the effective date.