PSC grants mandatory CPCN waiver to BGE for data center interconnection despite commissioners' concerns about cost and market impacts

The Public Service Commission voted Oct. 8 to grant Baltimore Gas and Electric Company a mandatory waiver of the certificate of public convenience and necessity requirement to modify overhead transmission lines and build related facilities to serve a new data center in Anne Arundel County.

Roger Austin, representing commission staff, said BGE’s filing described building a new substation within existing BGE right-of-way and replacing one existing monopole tower with two taller towers to tap into transmission circuits. Staff estimated the total cost for the first substation and associated work at roughly $19.8 million and said the waiver-specific work (tower replacement and dead-end structures) is about $651,000. Austin also reported staff’s review of two community meetings, observing no public opposition, and concluded the statutory conditions for a mandatory waiver under Public Utilities Article §7-207(b)(4)(i) were satisfied.

Catherine Moriarty, counsel for BGE, confirmed the company’s position that the initial substation and the waiver work will be paid for by the data center customer. "The 19,800,000.0 includes the costs for the overhead transmission line work that I'm requesting a CPC and waiver for here today and then the substation build out," Moriarty said, adding that the later, larger 2029 substation could be socialized under FERC-jurisdictional rates if BGE uses terminals to serve broader system needs.

Commissioners pressed staff and BGE on technical and market effects. One commissioner asked whether the project will increase line voltage; staff and BGE said voltage and conductors would not increase even though the new towers are taller (staff cited new towers of roughly 125 feet vs. 89 feet existing). Commissioners also asked whether BGE or staff had analyzed the impact of the additional load on capacity prices in the BGE zone; staff said it had not performed a capacity-price analysis, and BGE’s planning witness, Eric Gay of Exelon, said reliability studies for both the ~100 MW initial phase and a full build-out had been completed but that the capacity-price impact analysis had not been provided to the commission.

Commissioner Suchman said the commission’s hands are constrained by the mandatory waiver provision and warned the PSC has limited ability to address potential rate impacts: "I am troubled that our hands are tied and we have no ability to look at the impact of this project on repairs now and in the future." Other commissioners pressed BGE about whether the company will add storage or other measures to mitigate potential capacity-cost impacts; BGE said it expects the initial phase to use backup power and that future planning will address additional reliability and interconnection needs.

Staff's large-load workgroup lead, Drew McAuliffe, reminded commissioners of pending tariff work to address speculative load growth: once tariffs are adopted, large customers increasing load by 25 MW will be subject to collateral and other safeguards intended to limit speculative risk.

Chair Hoover moved to grant the mandatory waiver under Public Utilities Article §7-207(b)(4)(i). Commissioners McLean and Linton voted aye; Commissioner Suchman voted reluctantly but aye, and the waiver was granted.