PECO Implements Agreements with Data Centers for Grid Upgrades
PECO has initiated transmission security agreements to ensure data centers cover infrastructure costs, preventing local residents from subsidizing these expenses. This move aims to mitigate financial risks associated with significant investments in grid enhancements required for high electricity-demand facilities.
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PECO has established transmission security agreements with data centers to ensure they bear the costs of necessary grid upgrades. These agreements, in place since late 2025, require data centers to provide a 10-year letter of credit, allowing PECO to recover costs even if the data centers do not meet electricity usage projections.
Two agreements have already been signed for facilities in East Whiteland and Falls Township. The initiative addresses concerns from Pennsylvania lawmakers and utility regulators about local residents subsidizing the infrastructure investments associated with these energy-intensive operations. This strategy may influence future utility investment models and operational risks in the energy sector.
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