The Maryland State Administration proposed a bill to allow diesel generators at large data center campuses. Maryland Governor Wes Moore wants to overturn a Public Service Commission (PSC) decision to block the use of such generators for backup power. The Critical Infrastructure Streamlining Act (Senate Bill 474), proposed by Maryland Governor Wes Moore, will reclassify backup generators, notes Data Center Dynamics.
The measure comes three months after Aligned Data Centers pulled out of a plan to build 264 MW of hyperscale capacity on the Quantum Loophole campus in Western Maryland. The company couldn’t get permits to build all the diesel generators it needed.
The Quantum Loophole campus is less than 25 miles across the state line from Ashburn, VA, where the world’s largest data center hub is running out of space and power, according to Data Center Dynamics. The Maryland site is a former Alcoa aluminum smelting plant near Adamstown in Frederick County. It promises to offer space and room for large amounts of data center capacity.
Quantum Loophole’s first tenant, Aligned Data Centers, wanted to build 168 diesel generators capable of delivering 504 MW for its full build on the site. In October, Maryland’s PSC refused to give those diesels an exemption from its full permitting process.
After negotiations, Aligned pulled out. A second data center builder, Rowan Green Data, had plans to develop another part of the campus but was potentially facing the same problem, as it planned to use diesel generator backup.
Moore promised that the state legislature would address the data center industry’s needs and “ensure the industry has a bright future in Maryland,” reported the Frederick News Post.
Under existing state law, backup generators below 2 MW are generally allowed, while any installation bigger than 2 MW is classified as a “generating station” and has to be granted a Certificate of Public Convenience and Necessity (CPCN).
Aligned wanted its generators to be treated individually, and to get an exemption from the CPCN process, but the PSC rejected that. The proposed bill was introduced last week. It would redefine a “generating station” to exclude backup generators of any size, so data centers and similar businesses would not have to go through the lengthy delays of the full CPCN process.
Quantum Loophole’s VP of Sales Rich Paul-Hus welcomed the bill. He told Data Center Dynamics: “This legislation helps distinguish important differences between private backup generators and public utility generating stations in the state of Maryland. We support this legislation because if approved, it has the potential to further support various industries throughout the state that utilize backup generators such as healthcare, hospitality, manufacturing, and data centers.”
Maryland had previously passed tax breaks to incentivize data centers, and State Sen. William Folden sponsored the new bill. The Republican, who represents a district in Frederick County, said the measure would resolve a conflict emerging with this policy. He told DCD that Gov. Moore “wants to attract these facilities across the state. We’re right across the river from Northern Virginia.”
Dan Moore of Aeolus, a permitting consultant, commented: “The proposed legislation makes sense because the emergency generators are not connected to the grid and can’t be used for self-directed prime power generation. What this legislation means is that data center development would be outside the purview of PSC,” he said, although it would still be subject to air permits from the State of Maryland.
Maryland’s 90-day legislative session began earlier this month. A hearing on the Critical Infrastructure Streamlining Act has not yet been scheduled.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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