Pennsylvania is the largest exporter of electricity in the nation, the powerhouse of the PJM interconnection, and ground zero for America’s data center and Artificial Intelligence (AI) infrastructure boom. Announcements for data center investment in the commonwealth have reached more than $70 billion, including $25 billion from Blackstone, $20 billion from Amazon, a $10 billion gas-powered data center campus at the former Homer City coal plant, and a $1.6 billion restart of Three Mile Island’s (TMI) nuclear reactor under a twenty-year agreement with Microsoft.1,2,3,4
Yet, Pennsylvania is simultaneously a cautionary tale. From 2019 through 2024, regulatory uncertainty over the Regional Greenhouse Gas Initiative (RGGI) shrank Pennsylvania’s proposed generation pipeline by 62% in cumulative pipeline volume compared to the prior six-year period, and by 38% counting only genuinely new projects entering the pipeline. Developers who were building power plants at the fastest rate in the PJM region stopped proposing projects. Three large natural gas plants were cancelled. The state’s largest coal plant and a nuclear reactor closed. These reductions in supply, coinciding with new data center demand for electricity, rippled across the thirteen-state PJM grid: wholesale capacity prices spiked 833%, and the grid fell short of its reliability standard for the first time in history.5,6
Pennsylvania demonstrates a clear lesson. Any state imposing or threatening carbon taxes will see reduced generation, often requiring electricity imports to achieve the same level of reliable operable generation. New investment adapts, targeting states with regulatory certainty and a tax climate friendlier to new generation projects. Pennsylvania’s experience offers a transferable framework: what happens when state energy policy discourages investment in an industry where the state has a comparative advantage, and what policies elected leaders can pursue to prevent that outcome.
Read the entire article HERE: How Carbon Taxes Collapsed Pennsylvania’s Generation Investment and What It Means for the Data Center Boom – Publications – National Taxpayers Union
