Exelon Pushes for Expanded Role In Data Center Sector

Utility Dive’s Ethan Howland reports that Exelon is actively engaging with the growing data center sector. Utilities under Exelon are negotiating transitional service agreements to connect large-scale data centers, such as Amazon’s facility in Falls Township, Pennsylvania, to the grid. 

This pursuit of a more prominent role in providing electricity is happening in deregulated markets, including Maryland and Pennsylvania, where utilities cannot own generation facilities.

The company, which serves more than 10.7 million customers through six regulated transmission and distribution utilities, is emphasizing strategies to ensure reliable power while managing costs for consumers.

Exelon’s leadership has framed its efforts as a response to the growing complexity of electricity supply and the need for certainty in energy availability.

A recent request for proposals for reliable capacity reportedly fell short of target requirements in Maryland. Constellation Energy submitted gas-fired turbines and battery storage projects with effective load-carrying capability below the mandated threshold. Alpha Generation and Total Civil Construction and Engineering made smaller or confidential bids.

The Maryland Department of Natural Resources is expected to issue recommendations regarding which projects advance to fast-track review by the Public Service Commission.

These agreements allocate costs for necessary grid upgrades while attempting to protect the broader customer base from financial impacts. The Federal Energy Regulatory Commission and PJM Interconnection market monitors are assessing whether such arrangements could affect energy and capacity costs or compromise grid reliability.

Legal teams in the utilities sector need to prepare for the possible deregulation of market participation and large-scale infrastructure agreements that might follow. Oversight will be required in contract design, compliance with state and federal electricity regulations, and assessment of regulatory filings with FERC and state commissions.

Counsel may need to evaluate risk allocation, grid-impact considerations, and the potential implications of agreements affecting both traditional customers and large industrial users, such as data centers.