Maryland citizens face $2 billion power grid upgrade bill for out-of-state AI data centers

At a glance:

• Maryland's Office of People's Counsel filed a FERC complaint over PJM Interconnection charging the state $2 billion of its $22 billion grid upgrade costs for AI data center demand.
• The $2 billion bill translates to $1.6 billion over ten years for Maryland consumers: $823 million residential ($345/customer), $146 million commercial ($673/customer), and $629 million industrial ($15,074/customer).
• Maryland argues costs should be borne by the areas where infrastructure is built or by data center companies themselves under President Trump's "ratepayer protection pledge."

The complaint against PJM Interconnection

The Maryland Office of People's Counsel (OPC), a state agency tasked with representing utility consumers, has taken its fight to the Federal Energy Regulatory Commission (FERC) over what it calls an unfair $2 billion bill tied to transmission upgrades that primarily serve out-of-state AI data centers. According to the OPC's press release, PJM Interconnection, LLC spent $22 billion upgrading its grid to handle surging demand from power-hungry AI systems, and now plans to allocate $2 billion of that cost to Maryland ratepayers. The complaint argues that Maryland customers have neither caused the need for these projects nor will they meaningfully benefit from them.

Maryland People's Counsel David S. Lapp made the case bluntly: "Without FERC action, Maryland customers face paying billions for transmission infrastructure that PJM is advancing to benefit data centers. PJM's cost allocation rules are broken." The filing highlights what the OPC sees as a fundamental mismatch between who pays for upgrades and who benefits from them. Data centers — many located in other states within PJM's footprint — are driving the demand, yet existing residential, commercial, and industrial customers in Maryland are being asked to foot the bill.

How the costs break down for Maryland consumers

The OPC provided a granular breakdown of what the $2 billion charge means for Maryland's ratepayers over the next decade. The total projected impact is $1.6 billion, split across three customer classes:

• Residential: $823 million — approximately $345 per customer
• Commercial: $146 million — approximately $673 per customer
• Industrial: $629 million — approximately $15,074 per customer

These figures underscore the disproportionate burden on industrial users, who face costs that are orders of magnitude higher than residential customers. The OPC framed the numbers as evidence that the current cost allocation framework does not reflect the actual drivers of demand or the distribution of benefits from the upgraded infrastructure.

PJM's scale and the AI demand problem

PJM Interconnection is the largest electricity transmission company in the United States, spanning 13 states plus Washington, D.C. The footprint includes Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia — covering roughly 65 million people, or about 20% of the entire U.S. population. Several of these states, including Maryland, host large numbers of data centers, and PJM must continuously upgrade its transmission network to keep pace with projected load growth driven by AI workloads.

The OPC's complaint notes "extreme uncertainty" around load growth driven by data center demand. Utility providers, the agency argues, tend to benefit from grid upgrades even if the projected demand never fully materializes. That risk is borne by existing customers, not by the data centers themselves — unless those data centers voluntarily comply with what President Donald Trump called the "ratepayer protection pledge," which asks tech companies to directly fund grid upgrades rather than passing costs to ratepayers.

The ratepayer protection pledge and its limits

President Trump's "ratepayer protection pledge" was framed as a commitment from tech companies to ensure that infrastructure costs tied to their operations do not fall on everyday utility customers. Maryland's complaint essentially argues that the pledge is being circumvented: without federal enforcement, PJM's cost allocation rules allow transmission upgrades driven by data center demand to be spread across the entire regional footprint, including states where few or no data centers operate.

The OPC pointed out that if data centers do not follow the pledge, the costs of these investments are still borne by existing utility customers. This creates a scenario where utilities profit from infrastructure upgrades regardless of whether the projected data center demand materializes, while ratepayers absorb the financial risk. The complaint asks FERC to intervene and either restructure how PJM allocates these costs or enforce a framework that holds data center operators directly responsible for the grid upgrades their workloads require.

Why this matters beyond Maryland

The dispute highlights a broader tension in the U.S. energy landscape as AI deployment accelerates. Data centers are among the fastest-growing electricity consumers in the country, and the transmission infrastructure needed to serve them is expensive, time-consuming, and geographically complex. When a regional transmission organization like PJM spreads those costs across its entire footprint, states that are not major data center hubs can end up subsidizing infrastructure that primarily serves other regions.

The outcome of Maryland's FERC complaint could set a precedent for how other states handle similar cost-allocation disputes. If FERC sides with the OPC, it could force PJM and other grid operators to revisit how they charge for transmission upgrades tied to data center demand. If not, other states within PJM's footprint may face similar bills — and the broader question of who pays for AI's energy footprint will remain unresolved.

What to watch next

Observers will be watching FERC's response to the complaint closely. The commission has authority over interstate transmission pricing and cost allocation, making it the key venue for challenging PJM's approach. Additionally, the "ratepayer protection pledge" and its actual enforcement mechanisms remain unclear, and the OPC's filing effectively asks regulators to decide whether voluntary commitments from tech companies are sufficient or whether binding rules are needed. The next few months could determine whether Maryland's fight becomes a template for other states pushing back against grid-cost overruns driven by AI demand.