Northeastern Pennsylvania -
The hottest topic in regional communities these days revolves around data centers — and whether they will be good, bad, or even catastrophic for the people living near them.
John Augustine, president/CEO at Penn’s Northeast, hosted a seminar on May 13 that covered everything from local zoning issues, construction of new facilities, energy requirements, economic impact, and public perception.
Augustine said NEPA is a desired site for data centers because the region is a top producer of electricity, natural gas, and nuclear energy. He also said the economic impact for the area would be significant, creating more high-paying jobs than the region has ever experienced.
“Northeastern Pennsylvania is a strategic northeast location,” Augustine said. “We have a skilled workforce, strong infrastructure, and a world-class educational system.”
Augustine said the data center industry contributed $2.1 trillion to the U.S. GDP (2017–2021). In Pennsylvania, he said data centers added $14.4 billion to the state’s economy in 2023.
Two of the region’s major utilities — PPL Electric Utilities and Pennsylvania American Water — provided their comments on data centers and what each is doing to keep up with current and future demands.
PPL ELECTRIC UTILITIES
PPL Electric Utilities provided the following information:
On power supply and reliability:
“Your questions about grid capacity and reliability get to the heart of how the electric utility system is structured in Pennsylvania,” the utility stated in its response to questions from the Times Leader. “As a regulated transmission and distribution utility, PPL Electric Utilities is required by law to provide service to customers who meet inter-connection requirements. We don’t have the authority to deny service based solely on broader concerns about regional generation supply. That said, new large load requests are subject to extensive engineering and reliability studies and regulatory oversight.
“We are concerned about generation resource adequacy across PJM — the Pennsylvania-New Jersey-Maryland Interconnection. Retirements of power plants have not been matched by sufficient new, dispatchable generation, and PJM has been highlighting this concern since early 2023 — before the recent growth in large-load customers.
“As a result, wholesale market prices have increased because new supply has not kept pace with rising demand. All customers — whether they shop for supply or not — are experiencing those higher costs. These increases are driven by regional wholesale market conditions and generation availability, not by PPL Electric’s distribution rates, earnings or investment decisions.”
PPL Electric Utilities said the most effective long-term solution for affordability and reliability is to add new generation capacity.
“That’s why we have supported legislation to facilitate investment in new, dispatchable generation, including allowing regulated utilities to build and own generation as a backstop — subject to regulatory approval and oversight — when needed to address resource inadequacy and strengthen energy security in Pennsylvania. (HB 1272 and SB 897)
“At the same time, we remain focused on delivering stability where we can, advocating for additional customer protections and ensuring vulnerable customers get the help they need. Helping customers manage today’s bills is just as important as fixing the long-term market challenges.”
On grid capacity and energy infrastructure:
PPL Electric Utilities said it has consistently invested in the reliability and resiliency of its system to better serve customers and meet growing demand.
“Since 2013, we have invested $13 billion to modernize the distribution and transmission grid, making it smarter, stronger and more resilient. PPL Electric is nationally recognized for leveraging investments in grid-enhancing technologies to increase system capacity and performance.
“We work closely with customers to review and study each request to determine necessary upgrades needed to the system, as well as determine an appropriate timeline to meet both system and customer needs. Because grid conditions vary by location, responsible planning requires project‑specific studies rather than generalized assumptions. The process and standards are the same for every customer.”
PPL said many data center customers inter-connect at the transmission level. They pay for transmission upgrades required solely for their service, with system-wide benefits allocated under regulatory oversight.
“PPL Electric has safeguards in place designed to ensure that large-load growth does not unfairly affect customer bills, including binding agreements that establish long-term financial and usage commitments.
“In PPL Electric’s pending distribution rate settlement, a new large load rate class (LP6) includes a 10-year commitment designed to reduce the risk that other customers could be left paying for infrastructure costs if a large customer scales back or exits after only a few years. This rate class will also provide $11 million annually to support residential low-income assistance program, helping reduce costs for residential customers.”
Once connected, PPL said large transmission-level customers pay a significant share of system costs based on usage, which can help bring down transmission costs over time for all customers with broader use of the system.
On data center operations and community impact:
While the data centers are best positioned to address questions about facility operations and specific community benefits, PPL said it recognizes data centers as significant drivers of economic development — creating jobs and expanding the local tax revenue.
“These projects generate family‑sustaining jobs from construction through operations and contribute to funding for schools and community services. For projects of this size, PPL Electric typically supports 150-200 full‑time jobs during peak construction and execution across engineering, construction, and procurement.
“These projects represent real investment and opportunity. Our role is to ensure the grid is ready to serve that growth safely and reliably, and we have made the investments necessary to do so.”
PENNSYLVANIA AMERICAN WATER
Pennsylvania American Water said the company is committed to meeting the evolving needs of the communities it serves by working collaboratively with public officials and supporting major economic drivers, including data centers. Officials said this approach reflects the company’s broader mission to balance growth, reliability, and long-term sustainability.
“At the core of that mission are fairness and affordability. Pennsylvania American Water treats data centers like other large-volume customers by applying equitable rates, while also recognizing their unique operational demands and planning needs.
“Accordingly, every request for new or expanded water service is evaluated through a disciplined review process based on three key criteria — available source of supply (including the safe yield of reservoir sources), treatment capacity, and distribution system capacity. This framework ensures that new service can be provided responsibly without compromising existing customers.”
Within this structure, Pennsylvania American Water said it has received water service inquiries from more than a dozen proposed data center developers in Northeast Pennsylvania. One project is currently under a Water Facilities Extension Agreement to receive service in Salem Township, Luzerne County, reflecting the company’s careful, project-by-project evaluation approach.
Pennsylvania American Water said it also recognizes that technological growth can increase both energy and water demands.
“However, reported water usage figures often reflect short-term peak periods, such as the hottest weeks of the year. During cooler months, data centers typically require significantly less water, resulting in lower average annual demand.
“Over the long term, revenue from data center customers — along with developer-funded infrastructure investments — can help offset fixed system costs, enhance reliability through targeted upgrades, and support affordability for all customers. Importantly, data center developers are currently fully responsible for funding any capital improvements required specifically to serve their facilities.”
To further protect existing customers, Pennsylvania American Water said it retains the ability to limit service quantities and flow rates as needed. Investments made to serve large, specialized customers must not negatively affect service quality, system reliability, or rates for residential and small business customers. By allocating costs fairly, the company said it safeguards families and communities while still encouraging innovation and economic development.
“Through this disciplined, collaborative, and forward-looking approach, Pennsylvania American Water is well-positioned to promote sustainable growth, protect residential customers, and uphold environmental stewardship — both today and in the future.”
