CALVERT COUNTY — Southern Maryland Electric Cooperative (SMECO) briefed the Calvert County Board of County Commissioners on April 28, 2026, addressing community concerns about potential data centers and their effects on the local electric grid and member rates.
The presentation, delivered by SMECO Senior Vice President of External Affairs and Communications Tom Dennison and Transmission Engineering and Construction Director Hugh Voehl, outlined the cooperative’s power procurement practices, regulatory obligations, and safeguards for existing customers amid growing interest in large-load developments.
SMECO, which serves portions of Calvert County as an electric distribution utility, must provide service to any customer requesting interconnection under state law. However, the cooperative emphasized that data center developers would bear the full financial responsibility for necessary system upgrades.
“SMECO’s position (which is consistent with Maryland law) is that any data center seeking to build in Southern Maryland must directly pay the full cost for all electric transmission and distribution system buildout and ongoing operations and maintenance expense required to interconnect the data center and provide electric service,” according to the briefing materials.
SMECO also stated that data centers should offset any adverse impacts on members from participation in regional power markets and the locking up of generation capacity resources.
The cooperative purchases power through a managed portfolio of short-, medium- and long-term contracts to meet system demands. Unlike some investor-owned utilities, SMECO passes through wholesale costs without markup. Its Standard Offer Service prices remain the lowest in Maryland and lower than those of alternative suppliers.
Wholesale capacity prices have risen sharply in recent years as demand outpaces supply. PJM Interconnection’s 2024 capacity auction for the 2025/2026 delivery year cleared at a record $269.92 per megawatt-day, up from $49.49 previously. The price for the June 2026 to May 2027 period stands at $329.17 per megawatt-day, capped by the Federal Energy Regulatory Commission.
SMECO noted that data centers are not the sole driver of higher prices. Contributing factors include weather patterns, energy efficiency measures, labor and material costs, the retirement of baseload fossil fuel generation, and population growth. Maryland imports roughly 40 percent of its electricity.
As distribution customers, any data centers in SMECO’s territory would pay charges that help offset overall system costs for all members. The cooperative pledged to continue securing the lowest possible power contracts, hedging through its portfolio approach, and advocating in proceedings before the Maryland Public Service Commission (PSC), PJM, and the Federal Energy Regulatory Commission (FERC) to ensure data centers pay their fair share and do not burden existing ratepayers.
Regulatory efforts to address large-load customers are advancing at the state level. In June 2025, the PSC established Public Conference 72 to develop regulations and tariffs for large-load interconnections. In December 2025, it launched Rulemaking 93 on load study requests, with regulations moving toward final adoption. A workgroup is developing a straw large-load tariff focused on protecting ratepayers from adverse cost and reliability impacts.
Maryland law requires SMECO to file its own large-load tariff with the PSC by Sept. 1, 2026.
The briefing highlighted SMECO’s commitment to core principles of safety, reliability, and affordability while navigating grid modernization and the energy transition. Officials stressed ongoing protection of member interests as discussions about potential data center development continue in Calvert County and across Southern Maryland.
Community questions about electricity demand, reliability, and rate impacts prompted the session. SMECO serves thousands of residential and business customers in the region and has positioned itself to manage growth responsibly without shifting costs to existing members.
