SMECO tells Calvert commissioners data centers must pay for grid upgrades as public raises health, rate and water concerns

Tom Dennison, senior vice president of external affairs for Southern Maryland Electric Cooperative (SMECO), told the Calvert County Board of County Commissioners on April 28 that SMECO is obliged to provide service but that data center developers "must directly pay the full cost for all electric transmission and distribution system buildout and ongoing operations and maintenance required to interconnect" a facility to the grid. The presentation and multi‑hour question‑and‑answer session drew sustained public attention and dozens of resident comments urging a moratorium.

Why it matters: SMECO said wholesale capacity prices in PJM have surged, creating a higher commodity portion of customers' bills, and that large new loads — including two proposed sites with combined requested demand of roughly 1.1 gigawatts — could materially change local supply needs. Commissioners pressed SMECO on whether residential rates would rise and on what legal and regulatory mechanisms could protect existing members; SMECO said it would seek a large‑load tariff at the Maryland Public Service Commission and pursue rules to avoid subsidization of large loads by existing members.

SMECO's position: Dennison and transmission engineer Hugh Francis V emphasized that while PJM sets wholesale market prices and FERC sets certain caps, SMECO would require direct payment by any data center for interconnection and distribution upgrades and will file a large‑load tariff with the PSC by the statutory deadline. "Any data center seeking to build in southern Maryland must directly pay the full cost for all electric transmission and distribution system buildout and ongoing operations and maintenance required to interconnect that data center and provide electric service," Dennison said (Tom Dennison, SMECO).

Regulatory and practical uncertainties: Commissioners asked whether federal or state orders could require data centers to bring their own generation, what happens if a project cannot meet generation or interconnection requirements, and who bears PJM capacity and congestion impacts. SMECO acknowledged that wholesale price drivers are complex (weather, generation retirement, population growth) and that Maryland policymakers, PJM and FERC are part of the authority mix; SMECO said it would continue to press for tariffs and market rules that prevent existing members from subsidizing large loads.

Public comment and local concerns: Dozens of residents in public comment cited grid reliability, potential rate increases, water and stormwater impacts, land use, low‑frequency noise and proximity to schools and parks. Speakers asked the board to adopt a moratorium, require independent environmental and health studies, and ensure any developer commits to on‑site generation or long‑term compensation for local impacts. Residents called for transparent timelines and binding commitments before any land sales or zoning changes are finalized.

What happens next: SMECO said it will participate in PSC, PJM and FERC proceedings and file a large‑load tariff by the targeted filing date; commissioners asked staff to provide analysis of tariff options, likely customer bill impacts, and potential conditions to attach to local approvals. The board also heard repeated requests from residents to pause land dispositions and zoning actions tied to potential data‑center sites until independent technical reviews and public hearings are complete.

Reactions from officials: Commissioner questions focused on financial exposure and timelines; county staff and SMECO agreed to return with more detailed analyses and to coordinate with the county's legislative and regulatory contacts in Annapolis.

What's next: Commission staff will provide follow‑ups on tariff scenarios, projected bill impacts, and any municipal policy options for conditioning local approvals. The PSC filing and PJM studies remain critical steps before any developer could energize a megawatt‑scale campus.

Ending note: The meeting closed with strong public sentiment for caution. Residents urged the board to ensure benefits are tied to robust safeguards and binding commitments, while SMECO underscored that the technical and regulatory processes — including tariff filings and interconnection studies — will shape whether a proposed project can proceed and on what terms.