The Maryland Sierra Club has been researching the potential environmental impacts of data centers and developing recommendations for policy makers. Sierra Club recognizes that the growing data center industry provides an opportunity for economic growth in Maryland, and welcomes a conversation on the appropriate regulatory design to facilitate sustainable development. However, it is critical to recognize and respond to
the potential significant adverse climate, environmental, and health impacts of inadequately managed and unmitigated data center development.
Data centers can have significant impacts on local environments – including water use, land use, and noise – as well as public health impacts, especially when back-up diesel generators are employed.
The magnitude of energy use by data centers will present a significant new hurdle to Maryland’s ability to meet its statutory mandates under the Climate Solutions Now Act—which requires a 60% reduction in greenhouse gas emissions by 2031 and net-zero carbon emissions by 2045– while also threatening Governor Moore’s ambition of ensuring that “Maryland generates 100% clean energy by 2035.” The data center industry is rapidly growing and will drive unprecedented increases in electricity demand. While data centers currently use approximately 9.7 GW of power nationally, their demand for electricity is expected to triple to 27 GW in the next few years. This increased energy demand will mean more climate pollution in Maryland and risks negating the state’s greenhouse gas savings from our energy efficiency programs and renewable energy development.
Our Chapter Position Statement
Maryland should establish and affirm clear regulatory safeguards to manage the growth and impact of this rapidly growing industry. Maryland has the chance to get it right from the start, unlike some other states that are playing catchup and facing the prospect of skyrocketing electricity rates, new power plants, and significant public unrest. Our more detailed position statement speaks to these issues.
Regulatory Issues and the CPCN Permit
In Maryland, like most states, electric generators over a certain size must apply and secure the Certificate of Public Convenience and Necessity (CPCN) permit. Recognizing that these facilities have an impact on our environment, our communities, and the electric grid, the CPCN process provides a critical moment for public input and regulatory review. Backup power generation used at data center facilities is currently subject to review through the CPCN process.
In 2023, the Maryland Public Service Commission (PSC), in a 5-0 decision, issued a prudent refusal to exempt the proposed Aligned data center project from the CPCN process. The Aligned data center project proposed procuring 504 MW of diesel generators, enough power for approximately half a million homes. The Sierra Club supported this decision, filing a letter in support for denying the rehearing on Aligned’s requested exemption from the CPCN process. It is appropriate for power generation at this scale, whether to serve the grid or as backup, to engage in the CPCN process.
Legislation in the General Assembly
There are various bills moving in the Maryland legislature that relate to the growth of data centers in our state. Below are two that we have testified on, one against and one favorably.
HB 579/ SB 474: Critical Infrastructure Streamlining Act: HB 579/SB 474 is a bill introduced by Governor Moore to exempt certain generating facilities, including diesel generators, from the Certificate of Public Convenience and Necessity (CPCN) permitting process. We have testified in opposition to the bill, due to concerns about the environmental impacts of large scale diesel generating facilities and the wholesale repeal of an important regulatory process. You can read our full testimony here.
HB 905: Sales and Use Tax Exemption – Qualified Data Center Personal Property – Eligibility: HB 905, introduced by Delegate Charkoudian, represents an important first step in establishing smart regulatory safeguards for the growing data center industry. We appreciate its focus on procurement of clean, renewable energy and provisions on prevailing wages. You can read our full testimony here.
This important emerging issue will remain in the spotlight and require further activism and engagement to establish clear safeguards for data center growth in Maryland. Reach out if you would like further information or to get involved please reach out to Conservation Chair, Shruti Bhatnagar at shruti.bhatnagar@mdsierra.org.