Pennsylvania Locks Data Centers Into a 10-Year Power Tariff

The Pennsylvania Public Utility Commission⧉ -- the state agency that sets what regulated utilities may charge -- voted 5-0, with three partial dissents, on June 4, 2026 to approve a negotiated settlement in PPL Electric's first base rate case since 2015.▸ The settlement creates a new tariff class, Rate LP-6, locking data centers and other electricity users of 50 megawatts or more at a single site into minimum 10-year supply contracts with guaranteed usage floors -- a lower bar than PPL's own 100-megawatt proposal -- while raising the typical residential bill about 4.9%. The 158-page settlement⧉, negotiated among PPL Electric, the state's Office of Consumer Advocate, the Office of Small Business Advocate, and the low-income advocacy group CAUSE-PA, shifts $11 million a year in low-income-program costs onto that new large-load class, and separately raises the credit limit on PPL's low-income assistance program 60% starting in 2027, after the number of participants exceeding their old limit grew from 9,113 to 10,213 in a year.

Rate LP-6 exists because of a problem regulators, not PPL, identified first.▸ In the same case, PUC Vice Chair Kim Barrow cited PJM's own market monitor⧉ -- PJM is the grid operator that runs the wholesale power market and capacity auctions for a 13-state, mid-Atlantic region including Pennsylvania -- for the finding that data-center and other large-load growth accounts for 55% of the increase in capacity prices across PJM's last two auctions, a jump Barrow put at more than $7 billion. Utilities pass those higher capacity costs to all customers, regardless of who added the load. Rate LP-6 is the negotiated answer: PPL's own rebuttal testimony proposed the tariff apply only above 100 megawatts of peak demand, but the settlement as approved⧉ lowers that bar to 50 megawatts at a single facility, or 75 megawatts in the aggregate -- reaching more large-load customers than PPL itself proposed. Each covered customer signs a contract of at least 10 years and guarantees at least 80% of its contracted load in years one through five (50% in years six through 10, or 60%/30% under a voluntary interruptible option), with an exit fee tied to the remaining load obligation if it leaves early.

PPL Electric's case moved through three numbers before it was final.▸ Its original filing sought a $356.3 million annual increase in distribution base rate revenue; after intervenors challenged that in discovery, PPL raised its rebuttal position to $384.5 million. The negotiated settlement⧉ the Commission approved set the increase at $275,000,028 instead -- a 27.32% rise over PPL's current base rate revenue, $81.3 million below the original ask, which the Commission's decision⧉ frames as cutting the request by "more than $80 million." That still leaves an increase: for a residential customer using 918 kilowatt-hours a month, the current $177.01 bill would have risen to $189.40 under PPL's original proposal (about 7%); the approved settlement instead raises it to about $184.49 (about 4.9%) -- $4.91 less than the original ask, but $7.48 more than today.

PPL Electric's Customer Assistance Program (CAP) caps what low-income customers pay based on their income, not their usage -- but the cap has a ceiling of its own: a maximum 12-month bill credit, after which a CAP customer is billed the full budget rate for the rest of the period.▸ The settlement's own record⧉, citing figures CAUSE-PA submitted, shows that ceiling binding more often: 9,113 CAP participants -- 12% of the caseload -- exceeded it from August 2023 to July 2024; a year later, that grew to 10,213 participants, 15% of the caseload. CAUSE-PA asked the Commission to eliminate the credit limit entirely, or raise it at least 60%; the settlement adopts the 60% increase, effective January 1, 2027. A separate June 2025 rate change already added $37 million a year to what residential customers pay to fund CAP itself, a 5% to 41% increase depending on rate class. Against that, the settlement allocates $11 million a year in CAP-funding Universal Service Cost charges to Rate LP-6 -- $1 million more than PPL's own $10 million proposal, negotiated into the deal by the joint petitioners, including CAUSE-PA and the Office of Consumer Advocate.

The settlement carries dated commitments beyond the tariff itself.▸ PPL Electric implemented the approved rates for service on and after July 1, 2026, and, having settled, is barred from filing another base rate case until at least 2028 under the settlement's two-year stay-out. Two customer-assistance provisions take effect later: beginning January 1, 2027, PPL's Low Income Usage Reduction Program budget rises $1.5 million, to $13.5 million a year, with unspent funds rolling over rather than reverting; beginning July 1, 2027, PPL will waive reconnection fees for any customer at or below 150% of the federal poverty level. None of those dates is tied to a further PUC vote -- they are settlement terms the Commission has already approved, due on the calendar the settlement sets.