ALLENTOWN, Pa. — PPL Corporation announced Thursday that it has signed the White House’s Ratepayer Protection Pledge, a voluntary commitment intended to keep the costs of powering the nation’s data center boom off the bills of everyday electric customers.
The Allentown-based utility, which serves more than 3.6 million customers in Pennsylvania and Kentucky, joins a growing list of utilities, tech companies and state officials that have signed onto the pledge as data center demand strains the electric grid and drives up prices for households.
The pledge was first signed in March by major technology companies, including Amazon, Google, Meta, Microsoft, OpenAI, Oracle and xAI, according to a White House fact sheet.
Under the pledge, those companies commit to building, bringing or buying the power generation their data centers need, covering the full cost of related infrastructure upgrades, and negotiating separate rate structures with utilities and state regulators so those costs aren’t passed on to households.
It has since expanded to utilities, governors and other stakeholders, with the White House saying Thursday that more than 200 organizations have now signed on, covering about 80 percent of the electricity delivered to U.S. homes and businesses.
The pledge is voluntary and carries no penalty for noncompliance, and the tariffs that ultimately determine how costs are allocated remain the responsibility of state utility commissions, not the White House.
Chris Harto, a manager of sustainability advocacy at Consumer Reports, said in a statement this week that most Americans remain skeptical corporate pledges alone will keep data center costs off their bills, citing a recent survey by the organization.
“The customer-protection principles reflected in the Ratepayer Protection Pledge are consistent with our approach to responsible growth,” said Vincent Sorgi, president and chief executive officer of PPL Corporation. “Economic growth and customer protection can go hand in hand, and this pledge reflects that important balance.”
New rate class for large users
PPL points to a rate case the Pennsylvania Public Utility Commission approved in June as proof it’s already doing what the pledge asks. That settlement created a dedicated rate class, called LP-6, for data centers and other facilities seeking 50 megawatts or more of power.
Under LP-6, large-load customers must sign contracts of at least 10 years committing to minimum usage and payment levels, cover their own connection costs, and post financial security. Exit fees apply if a customer leaves early.
The goal, regulators say, is to keep the cost of new substations and transmission upgrades off residential and small-business bills. The class also sends $11 million per year to low-income assistance programs, starting in 2027.
Environmental and consumer groups, including PennFuture and the Natural Resources Defense Council, intervened in the rate case pushing for stronger protections and ultimately supported the settlement, though PennFuture said it hopes to see utilities “further develop critical consumer protections” as more large-load projects seek to connect.
Residential bills already rising
The same June settlement raised PPL Electric’s base distribution rates for the first time since 2016, adding $275 million to the utility’s annual revenue. The new rates took effect July 1.
For a typical residential customer using 918 kilowatt-hours a month, the monthly bill is projected to rise from $177.01 to about $184.49, a 4.9 percent increase, according to the PUC.
The company has agreed not to seek another distribution rate increase for at least two years.
Those distribution charges are separate from PPL’s Price to Compare, the default generation rate that resets each June and December and has also climbed this year amid rising wholesale power costs tied in part to data center growth across the PJM Interconnection, the regional grid operator.
PPL has also formed a joint venture with Blackstone Infrastructure, in which PPL holds a 51 percent stake, to build new natural gas-fired power plants in Pennsylvania.
The venture is structured separately from PPL Electric Utilities and is intended to be financed through long-term supply contracts with the data centers it serves, rather than through customer rates.
PPL said the effort is meant to support grid reliability and ease upward pressure on wholesale prices as data center demand grows.