Maryland is setting itself up to compete with Northern Virginia’s Data Center Alley with a 2,100-acre data center campus in Frederick County, and on July 31, the Maryland Public Service Commission granted a waiver for Potomac Edison Co. to install two 230-kV lines to help connect four data centers from the campus to a new substation. 

The 3-1 vote on the waiver allows Potomac Edison to begin construction on the lines in September without first requesting a certificate of public convenience and necessity (CPCN), a much longer and more expensive process.  

Commissioner Bonnie Suchman cast the single no vote, arguing the waiver could open the door for more waiver requests for similar line additions for more data centers, with other customers picking up the bill. 

Potomac Edison’s customers in Frederick County don’t need the upgrades at present, Suchman said. “Upgrades are only coming because of this new data center. … You’re going to get more data centers coming in, and more data centers are going to put more burdens on the system, and then you’re going to come to us for a waiver, and we’re going to sort of rush all this stuff through. 

“The data center may come or not, but the one thing I am seeing is an increase in the cost for the network that’s going to be borne by the ratepayer,” she said. 

According to commission staff, however, the project meets specific legal standards in the state’s public utilities code that require the PSC to grant the waiver: The new lines won’t require the utility to secure new property or rights-of-ways or to install bigger or taller structures for increased voltage or larger conductors. 

The Potomac Edison lines will be “loop lines” that run from an existing 230-kV line to a new substation to be built for the data center and then back to the main line. Each line will be 1,100 feet long and use the same type of wires as the existing line, and will include eight new poles, none of which will be taller than existing poles.  

The staff report also said the new lines and other system upgrades, including a switching station expansion, will mitigate potential thermal overloads and voltage violations the new data centers could cause on the main line, as identified by PJM. 

“PJM did that specifically for reliability reasons … not only to take into consideration [the data center’s] anticipated load, but the other load currently being served and to be served in that area, altogether about 1,350 MW,” said Joey Tsu-Yi Chen, corporate counsel for Potomac Edison. “We do not want to see a situation, in fact, cannot, where we have no more than 300 MW of load that would be interrupted by any particular criteria.” 

However, PJM spokesperson Jeff Shields said the RTO neither planned nor approved the two lines. Rather, FirstEnergy, which owns Potomac Edison, included the project in a supplemental filing to the RTO’s Transmission Expansion Advisory Committee in October 2023. 

Data Center Alley North?

Reliability aside, Chen told the commission the waiver was needed so the new lines could be built to meet the data center’s timeline. A full CPCN review would not meet “their timing needs for their project,” he said ― underlining the disconnect between digital and regulatory time frames, and Suchman’s concern Potomac Edison’s waiver request could be the first of many. 

Maryland has been promoting itself as a nearby, attractive alternative to Northern Virginia, home to hundreds of data centers and skyrocketing power demand. Gov. Wes Moore (D) rolled out the welcome mat in May when he signed the Critical Infrastructure Streamlining Act of 2024 (S.B. 474), waiving the need for data centers to get CPCNs for their fossil fuel-powered backup generators.  

The Frederick County data centers could provide a glimpse of what’s to come. The developer for the project is Rowan Digital Infrastructure, which provides “turnkey data center campus solutions” with “de-risked development timelines,” according to the company website. 

The data centers will cover about 145 acres in the larger, 2,100-acre Quantum Frederick data center campus being planned by developer Quantum Loophole. Rowan’s website describes its project as a multi-building facility with 300 MW of power to start and the potential to expand to 450 MW. 

The Frederick County site offers “near-term power interconnection dates [and] competitive power pricing … [and can] deliver the initial 300 MW by late 2025, providing a high-value alternative to the congested Ashburn corridor” in Northern Virginia. 

Quantum also has big plans for the site, which it intends to connect to its data center hub in Northern Virginia with a 40-mile fiber optic network ring. 

“At full capacity, the 34 conduits will hold more than 235,000 strands of fiber to transmit data between the two hubs in under one millisecond Round Trip Time (RTT),” a company press release said.