By: Senator Tracy Pennycuick
January marks the beginning of a new year, but it’s also when holiday bills come due. Like many of you, I use online sites to do most of my shopping. It’s convenient, quick and saves me from finding parking. We appreciate this modern convenience and don’t really think about how it happens. We’re just glad we can get our groceries the same day we order them.
Whenever you use your smartphone, check your bank account, send an email, or scroll through social media, data centers are working behind the scenes to make it all happen.
When we order a product from a website such as Amazon, we are accessing information stored in data centers. When we purchase goods or use services, we are asking data centers to execute the commands needed to buy something and send it quickly to our homes. We need data centers to enable vast amounts of data quickly, reduce operational costs, and provide security to protect sensitive data such as our financial information. As the backbone of artificial intelligence, much of our economy is now dependent upon data centers where all this information is stored. From your local grocery store to big retailers like Walmart or Home Depot, brick-and-mortar businesses depend on data centers to run their operations too. The increased use of AI will only add to the demand for more data centers and more power.
As Chair of the Senate Communications and Technology Committee, I am excited about the prospect of AI transforming numerous sectors, including health care, finance, and infrastructure to name a few, yet we must strike the right balance between growing our economy, advancing innovation, and protecting the electrical grid and our environment.
Environmental and infrastructure impacts must be carefully weighed, especially energy consumption. Pennsylvania is a net exporter of electricity to the PJM regional grid, which has historically helped keep our power prices lower than neighboring states, currently about 17 percent lower. However, as states like New York and New Jersey retire generation without replacing capacity, the region is facing a growing shortage of available power. That shortage is already driving higher prices.
Data centers and emerging technologies, particularly artificial intelligence, will significantly increase electric demand. To address this, I have advocated for PJM to establish a dedicated data center power auction. This approach ensures that data centers pay a higher price and their fair share for electricity and are not prioritized during grid emergencies, which will directly protect residential customers from bearing those costs.
My understanding is that this new rate structure will be implemented in the next PJM auction cycle.
In addition, I am working on legislation that would further reduce the impact of data centers on local power grids, including “bring-your-own-generation” policies. These would incentivize data centers to build their own power generation, potentially eliminating their strain on the grid and, in some cases, allowing excess power to be fed back into the grid.
I am pursuing a similar policy approach to address water consumption, with a focus on conservation, efficiency, and protecting local water supplies.
Data centers bring real economic benefits to local communities. Most notably, they create high-paying jobs particularly in construction and many of these jobs do not require a college degree, opening the door to careers for people with a wide range of skills and training. They also generate significant income tax revenue.
However, I strongly support a community’s right to decide for itself, through local zoning and land-use regulations, whether a data center is appropriate. I am currently working to amend legislation in the Senate Communications and Technology Committee to ensure that state-level actions do not undermine these local decision-making powers.
A clear example is the land swap involving state game lands in Limerick Township. I opposed this proposal and share the community’s belief that Pennsylvania’s protected woodlands should not be used for this type of development, particularly when there are other, more suitable parcels available where the environmental impact would be significantly lower.
As a legislator, I am in constant communication with local elected officials, tech and utility companies, watershed associations, and residents to listen to and address their concerns. Technology is changing every aspect of our lives. I am confident that by working together we can find the right balance as we move forward.
Senator Pennycuick represents the 24th District which includes parts of Berks and Montgomery counties.
CONTACT: Lidia Di Fiore (215) 541-2388