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Pennsylvania is on the cusp of a major wave of data center development. These facilities promise economic growth, but they also bring enormous electricity demand that is already driving up energy costs for everyday Pennsylvanians. Without strong safeguards, those costs will continue to shift onto customers who neither caused the problem nor have any way to protect themselves.
Pennsylvania must act now to protect customers from data center energy costs Share on XThis risk is not theoretical. Large load customers, including data centers, are already increasing electricity prices as utilities spend billions of dollars on new infrastructure to serve them. Without updated regulatory protections from the Pennsylvania Public Utility Commission, those impacts will only grow as more data centers come online.
Customers shoulder costs they didn’t cause
Residential and small business customers do not choose where data centers locate or negotiate interconnection agreements. They cannot redesign the grid or opt out of paying for utility investments. Yet under current practices, they can still be left holding the bill when large load customers trigger expensive grid upgrades.
This is precisely the sort of imbalance the PA PUC exists to address. We are relying on the Commission to do what only it can do: protect customers and ensure rates remain just and reasonable.
A welcome step forward
The good news is that the PA PUC recognizes the challenge. In its recent Tentative Order on interconnection and tariffs for large load customers, the Commission acknowledged that historical approaches no longer work in a world of modern, massive electricity users like data centers.
Most importantly, the PUC correctly recognized a key reality: large load customers will disproportionately consume the benefits of grid upgrades built to serve them. That insight matters, because it undermines the historical assumption that those costs should be broadly shared by all customers.
The Order takes several important and laudable steps. It suggests that large load customers should take greater responsibility for the costs of transmission upgrades built to serve them. It also recommends that these customers contribute to utilities’ low-income assistance programs – an essential protection given rising energy costs hit low-income households first and hardest. Advocates have been pushing for this latter reform for years, and it’s exciting to see the PA PUC take concrete steps to make it a reality.
What we recommend
Environmental Defense Fund filed detailed comments to strengthen customer protections while safeguarding grid integrity, treating large load customers fairly, and preserving flexibility for future improvements. Our most significant recommendation is simple and essential: the PA PUC should establish a clear, bright-line rule that large load customers must pay for the utility costs they incur.
The Order contemplates allocating costs based on an assessment of who benefits from data-center-triggered transmission upgrades. In theory, that sounds reasonable. In practice, it could lead to unpredictable, non-uniform, and unjust outcomes. Estimating future benefits is subjective, resource-intensive, and vulnerable to pressure – especially when large customers have a strong incentive to minimize their apparent share.
Our alternative is clearer, fairer and easier to administer. If a data center triggers new utility costs, that customer should be responsible for covering them. This approach would streamline cost-allocation rules, reduce disputes, speed project timelines, and – most importantly – help ensure ordinary ratepayers do not get stuck paying for infrastructure they do not need and did not request.
We also recommend additional rule improvements to bolster customer protections and increase data transparency. Strong reporting requirements and public access to aggregated data are essential for accountability as the state of Pennsylvania navigates this rapid load growth.
Setting the rules is a first step
The PA PUC’s ruling on these comments will mark an important milestone, but it will not be the end of the process. The Commission’s decision will establish a model tariff – but it will not automatically require utilities to adopt it. Instead, the real impact will take shape in future, utility-specific proceedings where these rules are put into practice.
EDF will be fully engaged every step of the way. We will continue working alongside our partners across environmental, consumer, and customer-protection organizations to advocate for rules that treat all customers fairly – not just the largest and most powerful ones.
Pennsylvania has a clear opportunity to get this right. With thoughtful action now, the PA PUC can support economic development while protecting customers from unjust energy costs.
While the Trump administration spent 2025 rolling back climate policies – increasing harmful pollution and driving electricity costs higher for families – states led with solutions that protect consumers, expand clean energy and advance more affordable, equitable electricity choices. These wins didn’t happen on their own. They happened where governors, regulators, consumer advocates, environmental organizations and community partners fought for cleaner air and lower bills – and where utilities were held accountable for delivering modern, reliable, cost-effective solutions. Here are some of Environmental Defense Fund and our partners’ most meaningful victories from the past year:
A Year of Big Wins for Clean, Affordable Power in the States Share on XIllinois curbed rate hikes and expanded access to clean, affordable electricity
Illinois regulators cut gas utilities’ proposed rate increases in half, trimmed the utilities’ profit rates, and rejected renewable natural gas proposals that would have raised costs without providing environmental value. EDF and Illinois PIRG were involved for months, urging regulators to require cleaner, cheaper alternatives – and the decision sends a clear message that utilities must modernize and offer cleaner, more affordable alternatives rather than double down on yesterday’s gas infrastructure.
Illinois regulators also unlocked more than $250 million for an electrified clean energy future: EV charging, fleet electrification, small business support and customer benefits. When the Illinois Attorney General challenged the Commission’s authority to approve these programs, EDF and partners intervened and won on all contested issues, protecting this progress.
EDF secured a landmark agreement with a utility to add new and expanded transmission lines – one of the most powerful tools for keeping electricity clean and affordable – and deploy grid-enhancing technologies to boost the performance of existing lines. These advanced hardware and software tools can cut the time and cost of connecting renewable energy to the grid. The agreement is expected to create up to 32,000 jobs, support power for 1.8 million homes, and deliver long-term savings for customers across the Midwest and beyond.
In Illinois, a new electricity rate called Rate BEST helps Commonwealth Edison customers save money using more renewable energy by shifting electricity use to times of day when power tends to be more affordable and cleaner. Since 2015, EDF and the Citizens Utility Board have championed time-of-use rates in Illinois, working with ComEd to design, pilot, and bring Rate BEST to customers in the new year.
New York advanced heat pump affordability and modern grid planning
EDF and partners secured an agreement with Con Edison to expand access to simpler, fairer electric rates designed for heat pumps – helping households cut heating bills and realize the full benefits of clean, efficient heating. These types of rates can save an average customer around $500 per year in energy costs. The utility will also expand outreach and education programs to help customers understand their options.
At the same time, the New York Public Service Commission advanced 29 critical electric grid upgrades to support electric vehicle (EV) charging and building electrification, then adopted a proactive planning framework that speeds interconnection of new loads while cutting costs. EDF’s recommendations helped drive these reforms.
Texas advanced EV charging and smarter grid planning
Texas also saw meaningful progress in 2025. EDF secured commitments from the utility CenterPoint to improve EV forecasting and modernize distribution system planning – essential steps for cost-effective electrification in one of the country’s fastest-growing EV markets. CenterPoint also committed to bolster its efforts to support the Port of Houston’s ongoing electrification, a move that will cut pollution and improve public health in surrounding communities.
Massachusetts helped customers reduce energy bills with clean heat
Massachusetts utilities – Unitil, National Grid, and Eversource – cut winter electricity rates for homes using heat pumps, saving these households about $540 on average this winter, a 17% reduction in heating bills. Adopted by the Department of Public Utilities, the rates fix long-standing inequities in how heat pump customers are charged. EDF intervened in National Grid’s rate case to secure the heat pump rate for all heat pump homes and a tiered discount rate of 32-71% for income qualifying households regardless of whether their home has a heat pump.
Looking ahead to 2026, EDF and partners are pushing for deeper seasonal delivery-charge discounts to better align winter electric heating costs with natural gas. New analysis commissioned by EDF shows that fairer rate design could enable more than 80% of Massachusetts homes to save an average of $687 in a single season – unlocking even greater benefits from clean electric heating and providing a model for other states.
In addition, Massachusetts began implementing landmark siting and permitting reforms adopted by the state legislature in late 2024. These reforms streamline and speed up the deployment of clean energy infrastructure, while helping ensure robust community engagement and careful consideration of project impacts. This year, the state released draft guidance and proposed regulations on site suitability assessments, cumulative impacts, and related issues. EDF has actively engaged at every stage of this process and remains committed to supporting the successful implementation of these critical reforms.
New Jersey protected customers and stopped costly hydrogen blending experiments
New Jersey regulators rejected a utility proposal to make customers pay for unproductive experiments blending hydrogen and biomethane – rebranded as “renewable natural gas” –into the gas system. EDF helped negotiate a settlement that scales back Public Service Electric & Gas’ (PSE&G) planned infrastructure spending, protecting households from unnecessary costs and keeping the state focused on cleaner, proven, and more affordable solutions. EDF also commissioned a study showing that PSE&G’s proposed hydrogen blending is far less efficient than helping customers electrify home heating with heat pumps.
A year of progress despite Washington’s attempts to reverse course
In a year when the Trump administration focused on undermining climate progress and helped drive up electricity costs, states showed what real leadership looks like. They cut unjustified rate hikes, rejected wasteful gas spending, required utilities to invest in modernizing the grid, expanded clean energy and secured fairer, more affordable electric rates for millions of families.
The message from 2025 is clear: a cleaner, more affordable, and fairer electricity system is possible, and EDF is committed to helping states deliver on this promise for everyone.
As COP30 came to a close, 23 countries — led by Brazil, India, Italy and Japan — signed onto a bold commitment: to quadruple sustainable fuel production and use by 2035. The ‘Belem 4x Initiative’, under the Future Fuels Action Plan, is one major signal that governments increasingly view alternative fuels not just as climate policy, but as a pillar of energy security, industrial competitiveness and supply-chain resilience.
https://blogs.edf.org/energyexchange/wp-admin/post-new.php Share on X
This shift is long-due, putting a real focus on the so-called hard-to-abate sectors, i.e. industries that require a lot of energy to reach very high temperatures or to move heavy loads. Heavy trucking, shipping, aviation, steel, cement and chemicals are together responsible for roughly one-third of global carbon emissions and as long as those sectors remain reliant on fossil fuels, global decarbonization efforts will fall short. Recent investments in alternative fuels by, for example, the EU, China, India, and others are critical steps toward filling this gap.
Still, the rising demand for alternative fuels brings critical questions: Which fuels? And how clean are they, really? The answers: it depends. And right now, we have an incredible opportunity to bring stakeholders together around sound science, innovative policies and best practices, to get the sustainable fuels ecosystem right as it develops.
Energy security meets climate reality
The strategic appeal of a diverse clean fuel mix is obvious. Countries that secure a portfolio of domestically produced hydrogen, e-fuels, sustainable biofuels and other low-emissions fuels can reduce reliance on unstable fossil import markets while growing their economies. They can protect themselves from geopolitical shocks, stabilize industrial inputs, and foster robust export industries — all while advancing a clean energy transition.
But this ambition should not come at the expense of environmental integrity. A new peer-reviewed perspective article from our own EDF scientists, recently published in Environmental Science & Technology, makes it clear: sustainability is not inherent to the molecule – it is a feature of the full value chain. Feedstock and energy sourcing, production efficiency, methane or hydrogen leakage, land-use impacts, carbon capture performance and combustion emissions all determine whether a fuel is genuinely sustainable, or no better (or even worse) than fossil fuels. The most successful strategies will build in environmental integrity from the start, to maximize all potential benefits.
The numbers confirm the challenge of scaling up sustainably. Today, sustainable fuels represent only 1.3% of total energy use worldwide. In its October 2025 report, the International Energy Agency calls on global use of sustainable fuels to nearly double by 2030 and expand fourfold by 2035, pointing to existing and announced policies as an achievable pathway.
IEA defines a ‘sustainable’ fuel as having a low (though unspecified) greenhouse gas intensity over its lifecycle, while complying with other sustainability criteria around biodiversity, water management and social safeguards. However, the range of actual GHG emissions and other impacts can vary greatly. For example, the chart below from the IEA demonstrates the wide range of emissions intensities that can exist within each pathway. Some pathways, like biomethane from food waste or alcohol-to-jet fuel from sugarcane, can offer a near-zero-emission fuel option — or they can be no better than natural gas (~50 gCO2/MJ). Moreover, even these ranges of IEA estimates are not comprehensive — they downplay or ignore warming impacts from indirect land use change and methane, ammonia and hydrogen releases (as outlined in EDF’s recent perspective paper).
Beyond labels: Why the details matter
Calling something a sustainable fuel based on its potential does not guarantee sustainability. Because the term encompasses dozens of fuel types and feedstocks, and a wide variety of production pathways and value chains, the environmental and social outcomes can vary drastically.
A few high-stakes examples:
Put simply: fuels that are irresponsibly sourced or poorly regulated risk locking in climate, environmental, and social harms right when the world can least afford them. That’s why fuel diversification must come with not only big aspirations, but high standards grounded in science. This is not only smart — it’s doable.
What policy and practice needs to look like
What’s needed now is to channel momentum (and finance) into pathways that deliver real climate, environmental and societal value. For policymakers, the steps should be clear:
This disciplined approach will not only safeguard the climate — it will also deliver greater energy security, economic resilience and long-term value for industry, governments and communities alike.
Why this matters — not tomorrow, but now
The world stands at a crossroads. As energy costs surge, supply chains fray and fossil fuel volatility deepens, the case for clean fuel diversification grows stronger every day. The COP30 pledge is a political landmark. But decisions made in the coming months — about which feedstocks to allow, how to measure emissions, how to regulate production, distribution and use — will determine whether the pledge becomes a historic success or a cautionary tale.
If we act decisively and in line with science, aligning policy, investment and environmental integrity, alternative fuels can become an integral pillar for decarbonization. They can be a cornerstone of global climate security, economic strength and energy sovereignty. But if we cut corners, chase quick wins or ignore the details, we risk trading today’s emissions for tomorrow’s liabilities. The path forward is clear. What matters now is not just ambition, but integrity.
Environmental Defense Fund is partnering with stakeholders to work on getting the necessary frameworks in place through, for example, our observer status at the International Civil Aviation Organization , the International Maritime Organization and other international fora. We’re using our science-led approach to proactively find the solutions that work for the entire ecosystem, and we’re ready to engage with all stakeholders to get this right.
