SMECO tells Calvert County data centers must pay to upgrade grid; residents demand pause

SMECO officials told the Calvert County Board of County Commissioners on April 28 that any large data center seeking to locate in southern Calvert County must pay the full cost of the electric transmission and distribution upgrades required to serve it.

The utility’s senior external‑affairs executive, Tom Dennison, said SMECO will file a large‑load tariff with the Maryland Public Service Commission by Sept. 1 that, in SMECO’s view, should ensure new large customers cover direct upgrade costs rather than be subsidized by existing members. “Any data center seeking to build in southern Maryland must directly pay the full cost for all electric transmission and distribution system build out and ongoing operations and maintenance expense required to interconnect that center and provide electric service,” Dennison said during the presentation.

Why it matters: Commissioners and residents pressed SMECO on market drivers — rising PJM wholesale capacity prices, local congestion and the region’s shrinking in‑state generation — and what that means for local rates and reliability. SMECO warned prices are at historic highs and said the proposed large‑load tariff is the primary mechanism to allocate costs, though federal and regional institutions (PJM and FERC) also shape capacity and market outcomes.

Details of the presentation: SMECO described how it procures power in the PJM regional market, the difference between commodity (standard offer service) and distribution charges on customers’ bills, and how new, very large electrical loads can require network and transmission upgrades. The co‑presenter, SMECO engineer Hugh Francis, outlined the cooperative’s study and feasibility process for large‑load interconnections and said developers are responsible for direct network upgrade costs and any security or construction guarantees required by SMECO or co‑located transmission owners.

Public reaction and next steps: After the SMECO briefing, public comment ran more than two hours and was dominated by opposition to proposed data‑center zoning and siting. Residents voiced concerns about noise, low‑frequency vibration, water consumption and the discharge of treated “purge” water from closed‑loop cooling systems, and about the proximity of proposed sites to multiple schools. Several speakers called for a pause or moratorium on approvals until the state’s environmental and energy studies are complete and the PSC’s large‑load tariff is finalized.

What the board did: Commissioners voted in the meeting’s later stages to leave multiple related proceedings open, and several commissioners proposed scheduling environmental‑commission presentations and a formal hearing focused on data‑center impacts. No final vote to adopt a moratorium took place at the April 28 meeting; commissioners asked staff to arrange follow‑up briefings and community engagement.

What to watch: SMECO’s large‑load tariff filing at the Public Service Commission and the state study of environmental and energy impacts are the key near‑term developments that could shape whether and how large data centers can interconnect to serve customers in southern Calvert County.