Dr. David Carter represents the 6th District on New Castle County Council. He is also a former senior environmental scientist and manager for the Delaware Department of Natural Resources and Environmental Control.
As New Castle County faces growing interest from data center developers, a crucial question has emerged: Under what conditions, if any, is it appropriate to allow on-site power generation for these massive facilities? While this is ultimately a decision for the Delaware General Assembly, the impact on residents, land use and energy costs will be felt most directly at the county and municipal levels.
A proposed New Castle County ordinance anticipates this challenge by addressing the possible future use of cogeneration, grid interconnections and microgrids should state law ever permit them. The ordinance establishes key safeguards: minimum residential setbacks, strict noise limits and coordination with state environmental and energy regulators. Whether or not Delaware proves suitable for data center development, we must ensure that, if projects proceed, they do so under standards that protect our communities and environment.
Across the country, states are rethinking how large data centers power their enormous energy needs. Traditionally, these facilities draw electricity directly from the regional PJM grid, which serves Delaware and 12 other states. When a hyperscale data center consumes thousands of megawatts around the clock, it doesn’t just raise local use; it increases wholesale electricity prices across the entire PJM region. Those higher costs are passed along to everyday ratepayers.
To counter this, several states now encourage “behind-the-meter generation,” in which data centers produce their own electricity on-site through cogeneration, natural gas turbines, batteries, renewable microgrids or, perhaps eventually, small modular nuclear reactors. These facilities meet their own power needs instead of relying entirely on the shared grid, an approach that reduces strain and keeps costs fair.
Ohio, Pennsylvania and Virginia are leading this modernization. Ohio’s Senate Bill 2 and House Bill 15 make it easier for data centers to build on-site power systems by clarifying that large users producing electricity for their own operations are not public utilities. Many new centers near Columbus now generate much of their own power, easing pressure on PJM and protecting Ohio ratepayers.
Virginia’s 2020 Grid Transformation and Security Act modernized the state’s power infrastructure and requires utilities to support renewable and distributed generation. Dominion Energy now allows large customers, including data centers, to operate their own generation and storage systems that serve individual campuses. These policies have enabled Virginia’s data centers to pair renewable microgrids with backup natural gas and battery systems, maintaining reliability without overloading the grid or raising regional rates.
By contrast, Delaware has yet to consider similar policies. Delaware law still prohibits new nonrenewable electric generation in the coastal zone, and neighboring states maintain outdated rules that make on-site generation complex or uneconomical. The result is a growing “free-rider problem.” When data centers in these states rely entirely on PJM power, they increase regional demand without contributing new generation, pushing costs onto households and small businesses across the region.
Delaware’s challenge is even greater. New Castle County’s population density makes large-scale cogeneration difficult without placing industrial-scale power systems close to neighborhoods. Such facilities would likely depend on natural gas and could add noise, emissions and land use conflicts. Many of the limited industrial areas suitable for these projects border lower-income and minority communities that already bear disproportionate environmental burdens. Bringing more energy-intensive industries into these areas would only deepen those inequities.
The larger issue is fairness. States that fail to require or encourage data centers to generate their own power are worsening a regional problem, while making no effort to fix it. The race to attract data center investment cannot come at the expense of working families, who end up subsidizing corporate electricity demands. True leadership means ensuring that innovation carries its own weight. If we can’t provide new power, we shouldn’t build new data centers.
New Castle County’s ordinance offers Delaware a responsible path forward. It neither promotes nor prohibits data centers; instead, it ensures that, if they come, they do so under clear, protective and enforceable rules. By setting thoughtful standards today, we can protect residents, prevent environmental harm and keep energy costs fair, not just for New Castle County but for everyone connected to the PJM grid.
Reader reactions, pro or con, are welcomed at civiltalk@iniusa.org.
