On May 7, 2026, Maryland’s top consumer advocate walked into a federal fight over who should pay for the power-hungry future of artificial intelligence. The Maryland Office of People’s Counsel filed a formal complaint with the Federal Energy Regulatory Commission, alleging that PJM Interconnection’s cost-allocation rules would force the state’s households and businesses to absorb roughly $2 billion in transmission upgrades driven almost entirely by data-center construction.
The filing landed just as PJM, the nation’s largest regional grid operator, was sounding its own alarm. In a public announcement accompanied by a market-design white paper, PJM committed to a sweeping overhaul of the rules that govern how new power plants get built and paid for. The operator’s executives framed the timeline bluntly: the system has years, not decades, to close a widening gap between surging electricity demand and the generating capacity available to meet it.
Together, these two moves expose a collision at the heart of the American power grid. One arm of the system is racing to attract billions in new generation investment before reliability cracks. Another arm, representing the 65 million people who depend on PJM for electricity across 13 states and the District of Columbia, is pushing back on how the tab for that buildout gets split.
A grid under pressure from AI and retirements
PJM coordinates the flow of electricity from western North Carolina to the New Jersey coast, managing a territory that includes some of the fastest-growing pockets of industrial power demand on the continent. Northern Virginia’s Loudoun County alone hosts the world’s densest concentration of data centers, and the facilities planned or under construction across PJM’s footprint are expected to draw power loads that dwarf anything the system was designed to handle.
At the same time, older coal and gas plants are retiring faster than replacements come online. PJM’s own capacity auctions have reflected the squeeze. The operator’s decision to launch a dedicated market-reform track suggests its internal planning models are flagging reliability risks within this decade, not in some distant future scenario.
The white paper released alongside PJM’s announcement ties the reform effort directly to these dynamics. While the full document’s granular demand forecasts have not yet been made public, the operator’s framing leaves little ambiguity: existing capacity-market and energy-market rules are not producing enough firm generation or flexible resources to cover rising peak loads. PJM is betting that redesigned market incentives can change that calculus before shortfalls materialize.
Maryland draws a line on $2 billion in costs
The Maryland Office of People’s Counsel did not wait for PJM’s reforms to play out. Its complaint, docketed as EL26-63-000 on FERC’s pending-complaints page, challenges the formula PJM uses to spread transmission-upgrade costs across its member states. The core argument: when a concentrated burst of data-center load in one part of the grid triggers expensive new transmission lines and substations, the entities driving that growth should bear the cost, not residential and commercial customers hundreds of miles away who never requested the upgrades.
The $2 billion figure comes from the consumer advocate’s own analysis and has not yet been tested through FERC’s adversarial process. PJM has not publicly disputed the number, but it has not confirmed it either. Readers should treat it as the complainant’s stated position, not an adjudicated finding. If FERC accepts the case for a full hearing, both sides will submit detailed cost studies, and the final allocation could shift significantly.
Still, the sheer scale of the claim illustrates how quickly concentrated industrial growth can reshape ratepayer exposure. For a Maryland household already paying rising electricity bills, the prospect of absorbing a share of billions in data-center-driven infrastructure is not an abstraction. It is a line item.
The cost-allocation fight could spread
Maryland may not be alone for long. Virginia, home to the largest cluster of data-center construction in PJM’s territory, faces comparable cost-allocation pressures. Other states in the footprint, from Ohio to Pennsylvania, could find themselves on one side or the other of the same question: should regional customers subsidize transmission built to serve hyperscale computing facilities that chose their locations based on fiber-optic access and tax incentives, not grid capacity?
No additional state filings have appeared on FERC’s docket as of late May 2026, and there is no public indication that PJM’s member states have reached a shared position on how to treat large, location-specific loads under regional cost-sharing rules. But the Maryland complaint has created a template. If other consumer offices follow, the resulting litigation could delay the very transmission projects PJM says it needs to maintain reliability, setting up a painful feedback loop: the grid needs infrastructure, but the fight over who pays for it slows the construction timeline.
Market reform and transmission battles on a collision course
PJM’s market-design overhaul and the Maryland cost-allocation complaint occupy different regulatory lanes, but they are heading toward the same intersection. Market rules determine how generators are compensated for building and operating power plants. Transmission tariffs determine how the wires and substations needed to deliver that power are financed and who picks up the check. If FERC ultimately orders PJM to revise its transmission cost-allocation method, those changes could collide with the incentives PJM is trying to create on the generation side, potentially requiring another round of stakeholder negotiations before either set of reforms takes effect.
The operator has not yet published a schedule for stakeholder workshops, FERC filings, or implementation milestones tied to its market-reform initiative. That absence matters. Without a concrete timeline, investors weighing whether to commit capital to new power plants inside PJM’s territory are left to guess how long the regulatory process will take and what the final rules will look like. Uncertainty of that kind tends to slow investment, which is the opposite of what PJM says it needs.
Why the clock on PJM’s grid cannot be paused
For the people and businesses that draw power from PJM’s grid, the practical stakes come down to two questions. First, will new power plants and transmission lines get built fast enough to prevent the reliability problems PJM’s own leadership has flagged? Second, will the cost of that buildout land on the companies whose demand is driving it, or will it be spread across millions of households that had no say in the matter?
The Maryland complaint suggests that at least one state believes the current answer to the second question is no. PJM’s reform initiative is an implicit acknowledgment that the answer to the first question is not guaranteed under existing rules. Until PJM releases detailed planning data and FERC begins to rule on how data-center growth should influence cost allocation, both the risk to grid reliability and the risk to household electricity bills remain clearly identified but unresolved.
Generating capacity takes years to permit, finance, and build. Transmission lines take longer. And every month the regulatory fights drag on is a month the gap between demand and supply has room to widen.
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*This article was researched with the help of AI, with human editors creating the final content.
