Maryland PSC warns ‘‘Type B’’ data‑center colocation could harm PJM reliability, shift costs to ratepayers

Fred Hoover, chair of the Maryland Public Service Commission, told the Economic Matters Committee that “this type of colocation could present significant risk to reliability to Maryland and the PJM region” after presenting the PSC’s December report on emerging ‘‘colocation’’ arrangements.

The PSC outlined two models. Under the report’s “Type A” model, a large energy user interconnects through the local distribution company and is treated as PJM network load subject to PJM planning and tariff cost allocations. Under the report’s “Type B” model, a large user (for example, a data center) takes output directly from a single generator under a bilateral contract and that load is effectively removed from PJM’s system studies and typical cost‑allocation rules.

Hoover said the practical effect of a Type B arrangement can be to remove generation formerly available to the broader grid. “If this type of energy user was directly connected to a plant … the output from that power plant would no longer be available to the PJM grid,” he said, noting that could accelerate resource‑adequacy shortfalls and raise prices for the rest of the region.

Commissioner Bonnie Sushman emphasized the planning gap that follows when an existing generator is…