Two profoundly flawed bills are under consideration in Dover and are currently in the Senate Environment, Energy & Transportation Committee. As written, both bills have potentially dire consequences for Delaware’s economy, our state’s energy policy, and Delaware households. We urge legislators to make the right decision for Delaware and to decline to release these bills from committee and to vote NO should they come to the floor. THERE IS TIME TO GET THIS RIGHT.
Both House Bill 445 and House Substitute 1 to House Bill 233 have problems that were not addressed during House consideration. Unfortunately, misconceptions and incorrect information. From an economic development and energy policy standpoint, both bills contain significant flaws that require changes to avoid serious negative impacts to Delaware’s economy and energy policy framework. These bills, as well as HB 310 which precludes data centers from being provided tax or other state financial incentives to locate in Delaware – have advanced based misconceptions.
Pennsylvania and other states are taking a far more balanced approach. At the same time that proposals such as House Bill 445, House Substitute 1 for House Bill 233, and House Bill 310 are being considered in Dover, Pennsylvania has announced the GRID proposal, a statutory and regulatory framework that allows for sustainable growth while also providing significant public protections.
PJM Interconnection, the entity which coordinates the movement of electric power in a territory comprised of 13 states and the District of Columbia. Power is generated and dispatched on a regional basis. If Delaware stays on its current course, it will be on the receiving end of whatever price impacts may result from the location of large load facilities elsewhere within PJM territory. And, Delaware will not, as a result, receive any of the benefits that come from the tens of millions in direct tax revenue, the skilled trades jobs, or the benefit to our local grid of the consequent infrastructure improvements and transmission and delivery revenue. All of which elevate Delaware’s economy while also allowing for reductions in rates to households and small businesses, and increased reliability.
While we recognize the need for a sound statutory and regulatory framework to govern the rapidly changing energy landscape, and support the development of such a framework, these bills do not provide that. While other states, including our significantly larger neighbor, are taking an approach that puts in place rate payer protections, while considering market forces, these bills in their current form would serve as a bar to investment in our state and harm our economy by discouraging new generation (both traditional and renewable), curbing investment in Delaware by industry sectors beyond the data center industry, negatively impact small businesses, and households, and forestall job growth.
There now remains only one (1) legislative day remaining this session. Neither House Bill 445 nor HS 1 for HB 233 has sufficiently vetted with community, business, or organized labor stakeholders. It is vital to the economic wellbeing of all Delawareans and to our state’s competitiveness in the regional, national and global marketplace that bills of this magnitude receive thoughtful consideration. There is time after July 1 to convene discussions with community, business and organized labor stakeholders to arrive at more effective and beneficial solutions.
The sponsor and the Public Advocate are operating under the assumption that our state is facing a deadline of July 1 to have a statutory and regulatory framework in place in anticipation of increased electric power demand from data centers and other potential large load customers. While we take their assertions as being based upon their good faith understanding and out of a sincere desire to protect ratepayers, we must respectfully point out that their assumptions are incorrect.
A May 19th letter from PJM Interconnection, requested that governors “immediately begin work” on creating a cost allocation framework within their states in advance of a pending “Reliability Backstop Auction” for electric power. “Immediately begin work” does not mean “immediately pass legislation, if your state has not done so, in advance of July 1, 2026.” In fact, there are clear and convincing reasons why Delaware has time to get this right instead of passing flawed legislation without sufficient deliberation or transparency.
No large interconnections can be undertaken at this time; and won’t be any time soon: There is currently an administrative stay on large load interconnections pursuant to Order No. 10829 (PSC Docket No. 25-0826).
While there is a pending “reliability backstop auction” that will be conducted by PJM Interconnection, that auction is not scheduled to occur until September, at the earliest. PJM is in the process of finalizing a filing with the Federal Energy Regulatory Commission that would, by necessity, precede the auction.
It is our understanding that the filing will follow an approximately 60-day clock (absent unforeseen circumstances which might involve a longer time period). The auction would commence in September (at the earliest), with auction results being final in late November (approximately).
Following the final results of the reliability backstop auction, the pertinent resources would need to be constructed (a process of several years), after which cost allocation would come into play. This pending auction does not pertain to Delaware right now as there are no interconnections to our grid scheduled for the next few years.
The few potential interconnections of a magnitude necessitating a cost allocation framework are in the study phase and would not approach the point of interconnection for a considerable period of time. To illustrate this point, we note that the recent (June 10-11) Reliability Backstop Procurement Design presentation made by PJM staff did not include an Initial Pro-Rata Zone Area Allocation [ a methodology used to calculate how much new power capacity (measured in megawatts) each utility’s territory is initially responsible for procuring to cover any potential regional electricity shortfalls due to large data center impacts.] for Delaware’s regulated electric utility, Delmarva Power.
It is our aim to work collaboratively toward constructive solutions with the sponsors and other legislators colleagues, the Delaware Public Service Commission, the Administration, and other stakeholders in the coming year to advance energy policy that benefits all Delawareans.
Delaware Building Trades Council
New Castle County Chamber of Commerce
Delaware State Chamber of Commerce
Delaware Contractors Association
