Don’t undermine Delaware’s economic future

Delaware is at a crossroads. Does it want to be a state that pursues economic growth, jobs and prosperity, or does it want to follow the path of its northeast neighbors and see jobs and economic growth flee elsewhere?

Senate Bill 205, as currently drafted, is an impediment to meeting the former and a catalyst for the latter. The bill would require certain large electricity users, like advanced manufacturers, including facilities using 30 megawatts or more, to meet new and vague guidelines to receive a new Certificate of Public Convenience and Necessity before operating or expanding. As written, the bill grants broad discretion to regulators without establishing a clear, predictable approval framework, creating uncertainty for employers considering investment in Delaware 

As lawmakers consider Senate Bill 205, they should carefully weigh how additional regulatory uncertainty could impact business development. Capital flows to states with consistent and predictable policy environments and away from states that embrace the uncertainty inherent in policies like those proposed in Senate Bill 205. The U.S. Bureau of Economic analysis shows the Mid-Atlantic region, which includes Delaware, lagging behind most of the country in both job and GDP growth. Passing this bill risks making this situation worse.

Importantly, Delaware already operates within a robust regulatory framework. Large electric users seeking to interconnect to the grid must comply with mandatory North American Electric Reliability Corporation standards and obtain approvals from PJM, the 13-state grid operator of which Delaware is a member; the Federal Energy Regulatory Commission; and Delmarva Power. 

They also must sign Transmission Security Agreements that include substantial financial security requirements designed to protect customers from stranded costs of infrastructure. If the required electric transmission upgrades are not completed, interconnection does not occur.

Additionally, comprehensive safeguards already in place ensure that if a large-load customer fails to meet its financial obligations, utilities can draw on letters of credit and issue the proceeds back to customers. 

In other words, consumer protections are already in place, ensuring that Delaware’s households, especially those on fixed and low incomes, are not left subsidizing abandoned infrastructure.

Concerns about growing demand from data centers and advanced manufacturers should also be viewed in context. Analysis in the PJM region, including findings highlighted in the Berkley Lab report, shows that data centers and other large loads, when planned correctly, can bear the direct costs of necessary grid upgrades through negotiated agreements and interconnection requirements. That structure ensures that upgrades are funded by the benefiting customer, not shifted to residential customers.

When integrated thoughtfully, large, steady loads can also improve grid utilization and support infrastructure investment that strengthens overall reliability. Such thoughtful industrial planning can only be advanced with clear rules of the road, rather than through vague processes that create new regulatory bodies with broad, undefined authorities to issue or revoke permits according to nebulous criteria that can be interpreted based on the whims of the politics of the day. 

Senate Bill 205 also risks unintended consequences for existing facilities. Its broad approval requirements could capture common maintenance or modest expansions in electricity use, potentially forcing facilities to pause planned projects or even normal operations while awaiting regulatory decisions.  

For hospitals, manufacturers and other critical industries, such uncertainty could create operational and safety challenges 

Large-load industrial facilities are being planned throughout the PJM region and will certainly impact power supply to Delaware regardless of where they are built. Policymakers should debate and advance regulatory frameworks that ensure the region has and can build the electricity generation needed to power these facilities, without risking significant household consumer rate hikes. However, these policies need to be advanced with a regional approach and should also focus on improving and adding to the power supply, rather than stopping the infrastructure needed for the forward-looking, AI-based tech future. Delawareans should look toward policies that reap the benefits of more jobs, economic growth and tax revenue that supports schools, first responders, roads, bridges and other services instead of ceding that to other states. Unfortunately, SB 205 would hamper, rather than advance, Delaware’s power supply and economic future opportunities.

For these reasons, Consumer Energy Alliance urges lawmakers to table Senate Bill 205, and engage stakeholders in a more comprehensive and balanced approach that includes siting and permitting reform that will put Delaware on a path to compete in today’s competitive business climate. Delaware can protect customers, ensure that large users pay their fair share of infrastructure costs, and maintain a reliable grid for families, schools and small businesses, all without imposing unnecessary barriers that ultimately drive up costs and weaken economic growth.