Lawmakers have singled out data centers as a major reason to increase energy production in the state.

Companies such as Amazon Web Services and Blackstone announced tens of billions of dollars in private investments to build out data centers in Pennsylvania. The facilities require huge amounts of both energy and clean water — the latter is used to cool the campuses. One projection estimates that global energy demand will increase by up to 165% by the end of the decade because of AI.

At the same time, Pennsylvania’s grid operator — PJM Interconnection — is seeing record-high prices at energy auctions. Those higher prices trickle down to consumers, according to utilities.

The most recent energy auction hit the price cap negotiated by Gov. Josh Shapiro and the grid operator, and still failed to procure the amount of energy PJM had targeted.

Senate Majority Leader Joe Pittman, R-Indiana, has also identified data centers as a key cause for increasing energy production in the state. Though he has not identified specific regulatory procedures that he supports for the burgeoning industry, he said consumer prices and energy production go hand in hand.

“The best way to protect consumers with the advent of data centers is to make sure supply meets demand,” Pittman said at a news conference following the budget’s passage. “We want to see responsible growth of data centers. We want to see (the) responsible growth of power supply.”

Any energy-related legislation will likely be referred to the Senate’s Environmental Resources and Energy Committee, and its chair, Sen. Gene Yaw, R-Lycoming, doesn’t think more renewable energy is the answer.

“Renewable energies and data centers, they don’t go together at all,” Yaw told Spotlight PA. “Data centers require continuous, non-intermittent power. And renewable power — it’s intermittent and of limited duration at best.“

Rob Routh, an advocate with the Natural Resources Defense Council, said gas plants have their own limitations and argued that Yaw’s comments ignore the effectiveness of battery storage technology.

Still, he called the data center issue “top of mind for legislators and their constituents,” and said there’s potential for House Democrats and Senate Republicans to collaborate on regulating their energy usage.

He pointed to a bipartisan agreement in the budget deal related to the Pennsylvania Public Utility Commission, which oversees utilities across the state. The legislation, which is now law, allows the agency to review and validate utility companies’ predictions to PJM of the amount of electricity needed — those estimates help set costs for consumers.

Routh said that one bill he’s keeping an eye on would direct the commission to draft regulations to oversee data centers and prevent spikes in electricity costs.

“It’s a new issue. It’s the key driver for why people’s electric bills are going to be going up in Pennsylvania,” Routh said. “There is the potential for bills around data centers to break through traditional partisan ideological lines.”