Pennsylvania’s primary electrical utility company, PPL Electric Utilities, has gained approval from the Pennsylvania Public Utility Commission (PUC) for the introduction of a new rate class structure that will establish a new large load customer rate for data center operators.

The new rate class includes binding long-term financial and usage commitments, including a minimum ten-year requirement for large load data centers. Starting in 2027, customers that fall under the large load rate classification will have to collectively pay $11 million annually through a non-bypassable charge to support assistance to low-income residential customers.

"As electricity demand grows, our priority is to maintain reliability, transparency, and fairness," Christine Martin, president of PPL Electric Utilities, said. "These provisions ensure customers driving new infrastructure needs pay their share, and existing customers are protected while supporting continued investment and economic growth."

The new rate class will lead to a 3.23 percent overall increase to residential customer bills, with industrial customers expected to see a $332.54 increase in their monthly billing.

According to the utility, the proceeds of the new rate class will be used to make targeted investments to enhance system performance and resilience, including replacing aging infrastructure, expanding vegetation management, advancing smart grid technology, and improving customer service systems.

The new rate class was influenced predominantly by the skyrocketing power requests from the data center sector. According to PPL, by late 2025, its advanced-stage data center pipeline reached 14GW, with more than 60GW sitting in the overall interconnection queue in Pennsylvania alone.

The massive load growth led Pennsylvania state lawmakers to advocate for structural changes in the rate classes for large loads, leading to a number of bills being proposed within the legislature, which are currently working their way through the state Senate.

Concurrently, in late 2025, the PUC issued an open order to establish statewide model guidelines for large load customers. Following this, PPL filed a major distribution base rate case formally proposing a large load rate class. In March, PPL reached a comprehensive settlement with intervening parties, leading to the approval from the PUC for the new rate structure.

Pennsylvania joins several other states in enacting similar rules for large load users. Ohio was one of the first states to pass a regulation to this effect, with the Public Utilities Commission of Ohio (PUCO) approving a new rate class in July. It requires new data center customers in Ohio to pay for a portion of their energy requests, even if they use less, to cover the cost of the infrastructure required to bring electricity to those facilities.

Following this, in September, Virginia’s main utility Dominion Energy proposed a new rate class for data centers, applying to utility customers who consume more than 25MW of energy and have a monthly load factor of more than 75 percent. The new rules are expected to come into force in January 2027.

DCD did a deep dive into the rising tide of legislation seeking to enact new rate classes for data centers in our latest magazine. Subscribe here for free.