In 1752, during one June afternoon in Philadelphia, Ben Franklin flew his kite in a thunderstorm.

The Founding Father attached a metal key to a hemp string on the kite, and put a wire on top to serve as a lightning rod. When he moved his finger near the key, Franklin felt a spark, evidence that electricity and lightning are linked. 

A year later, the Philadelphian received the Copley Medal from the Royal Society for his experiments on electricity.

Nearly 275 years since those first studies, and with America on the cusp of the nation’s 250th anniversary, the study of electricity has led to the world’s largest machine: the U.S. power grid. The vast network of power plants and transmission lines provides energy to more than 160 million customers. Franklin’s adopted home of Pennsylvania is the nation’s second largest energy producer, generating 240 million megawatts as of 2026.

“We’ve always been a hub of innovation since the days of Ben Franklin,” Gov. Josh Shapiro said in his budget address on Feb. 3. 

Today, Pennsylvania and the country’s infrastructure is being put to the test by an energy-hungry industry. America is experiencing an artificial intelligence boom, with President Donald Trump pushing the country to become a global leader in AI adoption and investment. With that push, comes consequences.

The data centers that house the critical IT infrastructure needed to fuel artificial intelligence require massive amounts of electricity. Big Tech firms are planning to build large scale data centers around the nation that run nonstop in support of their AI ambitions. In the wake of the AI boom, many residents want to know who’s going to pay for it - financially, environmentally and otherwise.

Data centers that house critical IT infrastructure have existed in various forms since the mid-20th century. But Big Tech firms plan to build large scale data centers that run nonstop and require massive amounts of electricity to support artificial intelligence. Data centers are expected to consume as much as 12% of U.S. electricity by 2028, according to a 2024 report by the U.S. Department of Energy.

 Shapiro wants Pennsylvania to be a hub for AI infrastructure, similar to the way the state’s coal industry helped fuel the U.S. Industrial Revolution. Eager to “win the battle for AI supremacy against China,” Shapiro has promoted a plan to fast track the permit process (permitting) for data centers. He has marketed the industry as an opportunity for economic growth and, last year, he announced a $20 million investment from Amazon to build AI and cloud computing campuses. 

More than 50 data center proposals have been introduced in the state including several in southeastern Pennsylvania. Municipalities have been rapidly writing new laws to regulate them. Nationwide, the trend has received opposition from Democratic and Republican lawmakers and local communities, citing concerns about air pollution, constant noise, water scarcity, effects on climate and an increase in electric bills. A recent poll revealed that 42% of Pennsylvanians oppose having AI data centers in or near their neighborhoods.

But for AI data center developers, Pennsylvania is a magnet for the industry. The state has ample land and fuel (it’s the second-largest natural gas producer), as well as water sources such as the Schuylkill River and access to the region’s grid operator PJM Interconnection, which is based in Montgomery County. But one question remains: Is the electric grid equipped to handle Pennsylvania’s plans for AI? And will residents have to bear the costs?

PJM Interconnection, the nation’s largest power market, manages the electric system that provides power to customers in Pennsylvania and 12 other states. Shapiro and other governors have criticized the company, arguing that delayed connection of new power sources to the grid has led to rising costs for ratepayers. Data centers are set to exacerbate those issues for the regional transmission organization. 

Data centers are expected to increase the demand for energy by 30 gigawatts between 2025 and 2030, a spokesperson for PJM Interconnection told the Local.

And that is already straining the grid. PJM recently warned that there’s not enough energy generation to meet peak demand nor required power reserves starting in June 2027. Company officials attributed the reserves shortfall to rising demand from electrification and data centers, as well as slow building of new power plants. If nothing changes, the region will be more vulnerable to outages.

“AI growth could outpace infrastructure without more rapid development of communication, more clear policy signals, and cooperation planning among utilities, PJM, and state regulators. The result will depend less on ambition and more on implementation,” said Bob Gourley, chief technology officer and co-founder of OODA LLC, an artificial intelligence and cybersecurity advisory firm.

Future challenges

Traditional data centers use hundreds of kilowatts to megawatts of energy, said Nilanjan Ray Chaudhuri, an electrical engineering professor at Penn State University. Data centers used to train ChatGPT and other AI models consume hundreds of megawatts.

Now companies like Amazon, Google and Microsoft are proposing even larger data centers called hyperscalers. These span millions of square feet and are entering into the gigawatt territory. One gigawatt is equivalent to 1,000 megawatts.

“We didn’t have such load growth this fast in our system ever in human history,” Chaudhuri said.

Most grid operators in the U.S. lack the resources to keep up with the projected electricity demand driven by data centers and other large loads, putting much of the country at growing risk of blackouts, North American Electric Reliability Corporation said in a January 2026 assessment.

Stakeholders in the industry need to comprehensively study these facilities first to ensure the grid can remain stable, secure and adequately resourced, Chaudhuri said.

The impact of this increased demand is reflected in rising electric bills. The typical residential bill in Philadelphia rose 10% in January 2025. 

“Utility bills have become a national news story to the extent that it hasn’t been as long as I’ve been involved, watching this space this century,” said Ari Peskoe, director of the Harvard Electricity Law Initiative.

Utilities are using subtle methods to push data centers costs onto consumer bills, Peskoe and legal fellow Eliza Martin argued in a 2025 paper. Residents who live near major data center activity saw a 267% increase in their monthly electric bills in the past five years, according to an analysis by Bloomberg Technology.

In PJM Interconnection’s case, consumer prices are going up for ratepayers because demand is outpacing supply. The most dramatic price increases are in the RTO’s capacity auction, where PJM pays power generators for their ability to provide energy during peak demand. Capacity prices were at a record-high for the third auction in a row in December. Data center load accounted for 40% of those costs, PJM’s independent market monitor reported. These auction results lead to higher electric bills for consumers.

“We all pay for these higher prices in the market,” Peskoe said.

Another cause for ratepayer increases in Pennsylvania is the amount of new infastructure being planned and built to connect data centers to the transmission system, said Darryl Lawrence, Pennsylvania’s Consumer Advocate.

“Those transmission costs will, for the most part, will directly end up in customers’ bills,” Lawrence said.

PA solutions

To reduce costs for consumers, PJM agreed to extend the capacity market price cap at future auctions for another two years, until 2030, following legal action by Pennsylvania, Shapiro’s office announced on Feb. 12. The move is projected to save 67 million Americans an additional $27 billion on their energy bills, he said. 

Shapiro sued PJM in 2024 over its price hikes and in 2025, the landmark settlement — approved by the Federal Regulatory Commission — significantly lowered its capacity price cap. Together PJM’s recent move and the 2025 settlement are expected to save PJM customers a total of $45 billion, Shapiro said in the release. That means $575 for every Pennsylvania household over the next four years. 

In January, a group of governors including Shapiro and the Trump administration urged the grid operator to expedite the construction of new power plants by having an “emergency” power auction in September, and they called on the grid operator to keep the price cap at future capacity auctions. 

Right after the announcement, PJM released a set of board-approved procedures aimed at accommodating data centers and addressing the need for new power generation. PJM has said it plans to submit an updated plan to federal regulators in May.

Shapiro also discussed energy affordability in relation to data centers in his budget address. He announced plans to have data centers to supply their own energy or pay for any new generation they need. 

Other Pennsylvania agencies and lawmakers have been focusing on reducing the impact of data centers on consumer bills.

The Pennsylvania Public Utility Commission has proposed a model tariff for “large load customers,” like data centers, to protect customers from increased costs. A final order has yet to be issued. And in Harrisburg, the PA Energy House Committee approved legislation on Feb. 2 that would direct the state utility commission to draft regulations that protect ratepayers from soaring costs posed by data centers. House Bill 1834 was sponsored by Rep. Robert Matzie, D-Beaver.

Lawrence said the state agencies and lawmakers are moving in the right direction to protect ratepayers, but the PUC needs to enact state regulations to “tie all of this together.” Federal regulators should also be involved in the regulatory process.

“I believe data centers in Pennsylvania represent an opportunity for the state,” he said. “They come with challenges, but I certainly view this as something that we can collectively solve. There are certainly ways to contract between the data centers and the electric distribution companies that will protect consumers from any costs that may be caused by the data centers.”

Other local impacts

One month ago, Ginny Marcille-Kerslake, of the West Whiteland Township Planning Commission, traveled to Northern Virginia’s “Data Center Alley,” the world’s largest concentration of data centers. Accompanying her were state Rep. Jamie Walsh, a Republican who represents parts of Luzerne County, and state Sen. Katie Muth, a Democrat, who represents parts of Montgomery, Chester and Berks counties. Their districts have been hard hit with data center proposals.

Marcille-Kerslake described the Loudon County location as “a ghost town,” with few employees walking in and out of the buildings. She could hear the hum from the data centers as far as 1,000 feet away. The group walked to the top of a hill to get a bird’s eye view of the area.

“You can see how there was a neighborhood, and then they built all around it … a nice looking neighborhood surrounded by these huge structures that are emitting a hum 24/7,” she said.

Similar to the past decade in Loudon, Pennsylvania is experiencing a “rush” to build AI data centers. A developer is building a data center nearby Marcille-Kerslake in East Whiteland. There have also been hyperscale data center proposals in Limerick, East Vincent, East Coventry and Plymouth Township.

Although Marcille-Kerslake appreciates Shapiro and lawmakers addressing energy affordability, the politicians are failing to consider the other potential effects on the community and environment, she said. 

In his budget proposal, Shapiro said his plan will also require data centers to hire Pennsylvania workers, enter community benefit agreements with towns, as well as comply with the “highest standards of environmental protection,” including water conservation. The state’s department of environmental conservation oversees environmental review for these projects.

The Local emailed Shapiro inquiring about these facilities’ impact on public health, greenhouse gas emissions and water sources. 

“The Commonwealth is uniquely positioned to lead the race to AI supremacy thanks to our energy resources, world-class research institutions, skilled workforce, and a permitting process that delivers speed and certainty – but we need to ensure that development puts Pennsylvanians first and not only benefits but protects our communities,” spokesperson Alex Peterson said in an email.

Barbara Sheehan, chair of the advocacy committee at EcoPhilly, isn’t buying Shapiro’s words about protecting the environment considering he exited the Regional Greenhouse Gas Initiative, an effort among states in the northeastern U.S. to reduce greenhouse gas emissions. Sheehan, a member of Our Mother of Consolation Church in Chestnut Hill, is skeptical that the Department of Environmental Protection, which one representative argues has been understaffed for years, will be able to accurately review these projects amid rapid development.  

“I think we need to worry about more than just the cost. I think the cost is something legislators can jump on quickly,” Sheehan said. “We need to worry about the effect on the health of Pennsylvania residents, especially in environmental justice areas.”