Pennsylvania's Public Utilities Commission chairman called for state-level preemption of local permitting authority over new electric-generation facilities to accelerate deployment.

Pennsylvania's Public Utility Commission faces a critical juncture as data center expansion threatens grid reliability. A PUC study released on September 14 examined the implications of rapid data center growth and grid stability in Pennsylvania and PJM, concluding that based on current load forecasts, the electric grid faces serious reliability risks. The analysis found that PJM fails to meet its reliability planning standard as early as 2027 through 2030, with the modeled reliability risk nearly six times worse than PJM's planning standard by 2030.

PUC Chairman Steve DeFrank framed the challenge starkly: "Pennsylvania is at an energy crossroads. Data center development brings significant opportunities, but that growth cannot come at the expense of the families and businesses that already depend on reliable and affordable electric service. This analysis sends a clear warning: electricity demand and supply are moving out of balance, and the status quo is not sustainable. We need urgent action at PJM and a broader Pennsylvania energy strategy that makes sure our supply of electricity keeps pace with demand."

Before a House Energy Committee information session, Chairman DeFrank outlined three critical actions the General Assembly should consider.

**Comprehensive Energy Strategy.** Pennsylvania, the nation's second-largest energy state, has operated without a comprehensive energy plan for over twenty years. DeFrank emphasized that developing such a plan is foundational to addressing current challenges.

**Local Preemption for Generation Siting.** Currently, generation facilities can be blocked by local communities, unlike transmission lines, which fall under state preemption authority. DeFrank called for similar preemption rights for new generation: "This entire grid needs increased generation, so there has to be a way of siting generation if a local community doesn't want it. I think that's an important point. I think anytime you look at a comprehensive energy plan, something like siting will be a component to that."

**Mandatory Generation for Data Centers.** DeFrank acknowledged a significant shift in his own position: "Requiring data centers to bring their own generation, I think it is important. And I switched my position on that. Two years ago, I would've said connect them. We'll figure it out later." He attributed the change to concrete evidence: "Two capacity auctions have happened where we missed reserve margin significantly. It wasn't close. I mean, we missed the reserve margin—six, eight gigawatts, I believe, right? I mean, it was significant. That's what caused me to change my position. I think data centers are an incredible opportunity, but we have to get it right. If we don't manage it and put our heads in the sand, we will have disaster."

Drawing on his Southwestern Pennsylvania roots, DeFrank warned against repeating historical mistakes. "I grew up next to orange creeks and things like that. I am well aware of acid mine drainage," he said, referencing the coal industry's environmental legacy. "Here, it's going to be much different, because if we don't have this well planned, we're not talking about orange creeks. We're talking about lights going out. That's the ramifications here. So we have to get this right. This is an incredible opportunity, but we have to address the problems that we're faced with."

The PUC has identified 21 deactivated energy sites across the state as potential generation locations. On October 7, the Public Utility Commission will hold a meeting in Hearing Room 1 of the Keystone Building (9:30 a.m. to 4:00 p.m., with online livestream available) to hear a preliminary report from KeyLogic, LLC on recommendations for electric grid modernization. The presentation will focus on "data-driven recommendations to support energy growth and grid modernization across this Commonwealth" at these 21 sites, followed by panel comments.