Residential electricity customers in West Virginia and Maryland are absorbing billions of dollars in transmission costs driven by Virginia’s rapid data-center expansion, even though the economic benefits of that growth concentrate in Northern Virginia. The dispute centers on PJM Interconnection, the regional grid operator that coordinates electricity delivery across 13 states and the District of Columbia. A formal complaint filed by Maryland’s Office of People’s Counsel challenges the cost allocation rules that spread data-center infrastructure expenses across the entire PJM footprint, hitting households in neighboring states with higher bills they did not generate.
How PJM cost rules shift data-center expenses across state lines
The core tension is structural. PJM manages the regional transmission grid that connects utilities in Virginia, West Virginia, Maryland, and ten other states. When new high-voltage lines or substations are built to serve data centers clustered in Loudoun County and Prince William County, Virginia, the costs do not stay in Virginia. PJM’s existing formulas allocate those expenses based on factors like peak demand and load ratios across its territory. That means a retired steelworker in Wheeling or a schoolteacher in Baltimore can see rate increases tied to server farms they will never visit.
The same dynamic applies wherever a single utility or grid operator straddles multiple states. Appalachian Power, a subsidiary of American Electric Power, serves customers in both Virginia and West Virginia. When Virginia-side load growth from data centers triggers grid upgrades, the recovery of those capital costs flows through rate cases that affect customers on both sides of the state border. West Virginia households, which generally have lower median incomes than Northern Virginia suburbs, bear a disproportionate share relative to the local economic activity those data centers produce.
Because PJM operates as a unified regional market, it does not distinguish between “data-center lines” and “everyone-else lines” when assigning costs. Instead, it treats major transmission projects as shared assets that support regional reliability. In practice, that approach can blur the line between upgrades needed to keep the lights on and projects primarily justified by the concentrated growth of large industrial customers, such as cloud-computing facilities.
Maryland’s $2 billion complaint and its regional implications
Maryland’s Office of People’s Counsel put a dollar figure on the problem. The agency filed a complaint arguing that PJM’s cost allocation rules assign about $2 billion in transmission spending linked to Virginia data centers to Maryland ratepayers. The OPC contends those rules do not reflect who actually benefits from the new infrastructure. Data centers in Virginia generate tax revenue, construction jobs, and corporate investment for Virginia localities, yet the grid upgrades they require get billed to customers spread across the mid-Atlantic region…