Maryland homeowners are on the hook for the AI buildout next door. PJM Interconnection, the largest US grid operator, is making Maryland customers cover the costs for transmission projects driven primarily by energy needs of data centers outside the state, Maryland’s Office of People’s Counsel alleged in a complaint to the Federal Energy Regulatory Commission.
What the state agency is alleging
Maryland homeowners will pay an extra $1.6 billion on their electric bills over the next decade to subsidize grid costs to feed data centers, according to a state agency. Homeowners are effectively subsidizing data-center growth due to the way PJM allocates costs to build those projects, said the agency that represents the interests of Maryland’s residential ratepayers.
The Office of People’s Counsel released a new report warning that homeowners could face $1.6 billion in additional power bill costs over the next decade to subsidize transmission line upgrades, largely due to data center demand outside Maryland, more specifically from data centers in Northern Virginia. OPC filed a complaint with the Federal Energy Regulatory Commission arguing that PJM Interconnection is forcing Maryland power customers to shoulder costs for grid expansion projects that feed into Northern Virginia.
Why the bill is landing on Maryland
This is not the first time Maryland’s Office of People’s Counsel has taken issue with state bill payers subsidizing energy bills for energy centers that are not within state borders, particularly those in neighboring Virginia. In 2024, it urged federal regulators to reject PJM’s plan to spread the costs of $5 billion in transmission upgrades tied largely to booming Virginia data centers.
Last year, a regional utility alliance stretching from New Jersey to Chicago approved $5 billion of new interstate transmission projects designed largely to accommodate new data centers. Under FERC’s approach, Maryland utilities will pay about half a billion dollars. That state’s PUC uses a decades-old formula that will result in residential ratepayers bearing most of those costs.
The capacity auction backdrop
In PJM’s 2024 auction, capacity costs jumped from about $2 billion to nearly $15 billion for the upcoming year. The most recent auction to determine the cost for 2026-27 hit another record high at just over $16 billion.
In Maryland, rates have risen 50.94 percent over the past five years. In Virginia, which has the most data centers of any state, bills have risen 24.56 percent over the last five years.
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The political response
At least 11 states have proposed some legislation to restrict or ban data center development since late 2025, according to reporting by Axios. Maryland’s own legislature passed the Utility RELIEF Act this spring, which took a step toward regulating the data centers proposed across Maryland by expanding the number of such supercomputing facilities that have to pay a special tariff for the large amounts of energy they use, and offered to streamline permitting for centers powered by renewable energy.
For traders, the takeaway is that the politics around AI power demand are tightening at the state level, even as hyperscaler capex continues to accelerate.
Options market and stocks to watch
Watch for movement in names tied to the data center power trade and Mid-Atlantic utilities:
- EXC: Exelon owns BGE and Pepco, the Maryland utilities most directly exposed to the OPC complaint and any FERC cost-allocation reset.
- D: Dominion Energy is the Virginia utility on the other side of the trade, benefiting from data center load growth that Maryland is allegedly footing.
- VST and CEG: Independent power producers leveraged to PJM capacity prices, which keep printing record auction clears.
- NVDA: Watch for any read-through if state-level pushback slows or repriches data center buildouts.
- AMZN and META: Hyperscalers are the ultimate beneficiaries of subsidized transmission and the targets of advocates pushing for cost reallocation.
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