PA Gov. Shapiro Continues to Bully PJM Grid to Dump Free Market
Last Friday, the Trump administration officials joined several governors from the 13 states that are part of the PJM Interconnect grid to outline a broad plan they say will ensure customers of the grid will not face skyrocketing electric prices due to new AI data centers getting built in the region (see White House Joins 13 Governors to Gang Up on PJM re Data Centers). Neither the White House nor the governors who attended (including the ringleader, PA Gov. Josh Shapiro) invited PJM to attend their blabfest. PJM didn’t take it lying down. On the same day as the blabfest, PJM released its own plan to add new data centers while controlling rising electricity costs (see PJM Unveils Its Own Plan to Add AI Data Center, Control Costs). We now have competing visions for how best to add new capacity while controlling costs: distort the free market with price controls (Shapiro’s plan) or use the free market to bring costs down (PJM’s plan). Read More “PA Gov. Shapiro Continues to Bully PJM Grid to Dump Free Market”
There are two universal, unavoidable truths of life: (1) death, and (2) Democrats love to tax anything and everything. Pennsylvania Democrats are urging state lawmakers to tax data centers to shield residents from rising energy bills. During a hearing held by PA House Democrats on January 20, so-called experts argued that data centers must “pay their own way” for grid upgrades necessitated by their high demand, rather than passing those costs to households. With grid operator PJM Interconnection warning that surging demand could cause blackouts, Democrats proposed legislation to protect ratepayers from price spikes. Although some officials value the industry’s job creation, tax proponents insist that ordinary consumers should not subsidize the infrastructure needed to support the state’s expanding and energy-intensive digital industry. 
On Friday, the White House joined with the 13 governors whose states in whole or in part are served by the PJM Interconnection electric grid, the largest grid in the country, to propose a solution that “protects consumers” from soaring electric rates due to the addition of new AI data centers (see 
In 2015, a group of landowners in northeastern Pennsylvania who had leased their land for fracking filed a lawsuit against Chesapeake Energy, Anadarko, Statoil (now Equinor), Mitsui E&P, and Access Midstream (later bought by Williams), alleging the companies had improperly deducted post-production costs (e.g., gas gathering and transportation expenses) from royalties owed to the landowners in breach of their respective leases. The lawsuit also alleged collusion and conspiracy to defraud the landowners (antitrust violations). The lawsuit was on hold for many years while other lawsuits played out. In 2024, a federal court in Scranton unpaused the lawsuit, and the judge ruled, tossing out the landowners’ royalty claims (see 
AI data centers are all the rage. The news (local and national) is full of such stories, playing up opposition to data centers. We’ve written plenty about AI data centers on MDN, given the close connection to gas-fired power that’s needed to operate them. We’ve also told you about a developing trend of “behind the meter” gas-fired power plants, built at the same location as a data center. That’s when the data center is built next to a power plant or vice versa. The electricity goes directly to the plant and never flows through the local power grid. Another part of this story is that sometimes the gas-fired power plant that’s on-site powering the data center receives its gas from a well drilled at the same site! The gas flows directly into the gas plant (bypassing gathering pipelines), and the plant produces electricity for the data center. And therein lies a potential, very thorny issue. 
Last October, a seven-member, all-Democrat group of Pennsylvania House of Representatives members announced a six-bill legislative package aimed at regulating the “responsible development” of artificial intelligence (AI) data centers in the state (see 
Constellation Energy Corporation has finalized its acquisition of Calpine Corporation from Energy Capital Partners, becoming the largest electricity producer in the United States, with a generating capacity of 55 gigawatts. This merger integrates Constellation’s zero-emission nuclear fleet with Calpine’s natural gas and geothermal assets. Prior to the merger, Calpine owned 79 energy facilities across the country, generating some 27 gigawatts (GW) of electricity, with a significant number located in the eastern U.S. Many of Calpine’s facilities use natural gas to produce electricity. 
In November, Pennsylvania finally passed a budget—four months late. As part of the deal struck between Democrats and Republicans, the Regional Greenhouse Gas Initiative (RGGI) carbon tax scheme was permanently ash-canned (see 
The short answer to the question posed in our headline is, “We sure hope so!” Yesterday, MDN reported that the Pennsylvania Department of Environmental Protection (DEP) has officially adopted a final version of updated Environmental Justice (EJ) regulations (see 
The highly functional and responsible Susquehanna River Basin Commission (SRBC), unlike its highly dysfunctional and irresponsible counterpart, the Delaware River Basin Commission (DRBC), continues to support the shale energy industry by approving water withdrawals and consumptive use for responsible and safe shale drilling. The SRBC also tells shale drillers when to stop withdrawing if low water flow (i.e., drought) conditions exist. Or when a body of water is frozen or blocked by ice. That’s what the SRBC did yesterday. The agency, via its Hydrologic Conditions Monitor, warned shale drillers that, at 58 listed locations (all in Pennsylvania), they must stop water withdrawals until streamflow reaches a specific “trigger flow” target (different for each location) or until the ice thaws. 
Sometimes politics is a game of “chicken” whereby you must keep fighting and wait out the other side when you *know* you are in the right. Such was the case with Pennsylvania Democrats’ insistence that the state join the Regional Greenhouse Gas Initiative (RGGI) carbon tax scheme. RGGI aims to force coal- and gas-fired power plants to shut down by making them super expensive to operate. Tax them out of existence on the theory that unreliable renewables like wind and solar would replace them. But Republicans in the PA Senate kept fighting—for seven long years—and finally won (see 
Here we go again. Pennsylvania Democrat State Reps. Chris Pielli, (Chester), and Tarik Khan, (Philadelphia), have introduced a bill that would establish a severance tax on natural gas production. Specifically, the legislation introduces a per-volume severance tax on natural gas operations. The bill would place the new severance tax on top of the existing impact fee (i.e., tax), creating a double tax on the Marcellus industry. Adding a severance tax to the existing impact fee would instantly make PA’s tax on natural gas extraction the highest in the nation. The purpose is not revenue generation but the death of the Marcellus production in the Keystone State. Do the Dems never tire of attacking the Marcellus industry? 
Pennsylvania has a big problem. The state is retiring older coal- and gas-fired power plants faster than it can add new plants. Plus, the state needs to *grow* its electric generation capacity to meet new demand from AI data centers. PA State Senator Gene Yaw has a solution: modify the existing 1971 Economic Development for a Growing Economy (EDGE) tax credit program by adding a provision granting a tax credit for any $400+ million investment in “baseload power generation” (i.e., gas-fired power generation). Yaw wants to make it a no-brainer for power plant builders to make the Keystone State their destination for new projects.