Delaware enacts clean energy mandate for hyperscale data centers

Delaware Governor Matt Meyer has signed a package of legislation aimed at shielding residential ratepayers from the financial strain of rapid data center expansion, introducing a first-of-its-kind clean energy requirement for hyperscale operators in the state.

The new laws establish a "bring your own power" mandate, requiring data center operators to develop their own clean energy generation to supply their facilities over a ten-year period. A portion of backup power systems must also draw from clean energy sources, marking a significant shift in how the state regulates large-scale digital infrastructure.

"Delaware is open to innovation, investment and economic growth, but growth must be responsible. It cannot come at the expense of those who live here," Meyer said during the bill-signing ceremony. "Data centers that do not pay their fair share do not belong in our communities. Data centers cannot jeopardize the reliability of our electric grid, and Delaware ratepayers will not be asked to subsidize enormous demands for power."

Under the new framework, Delmarva Power, a subsidiary of Exelon, will create a separate, higher electricity rate class for hyperscale data centers. Operators in this class will be required to bear the costs of new transmission and distribution infrastructure, as well as capacity procurement, wherever feasible. The rules also mandate that large-scale facilities reduce power demand during peak periods to prevent grid outages, and prohibit data centers from receiving tax credits tied to job creation.

The legislation has drawn praise from environmental advocates. The Sierra Club said in a statement: "These bills make Delaware a leader in promoting protection of our energy grid and electric costs for residential customers. Delaware, the first state, is now the first state in the nation to pass a bring your own energy policy with clean energy requirements, the First State to require such a comprehensive agreement with the utility to guarantee all data center costs are paid for by data centers, and the first state to remove the obligation to supply electricity to these large loads if it would harm consumers."

Delaware currently hosts a modest data center footprint, with Data Center Map listing 19 facilities, mostly concentrated in Wilmington. However, the state's pipeline includes several large-scale projects that could dramatically expand capacity, notably a 1.2GW development by Starwood in New Castle, roughly seven miles south of Wilmington.

The move positions Delaware among a growing list of states tightening oversight of data center power consumption. The Tennessee Valley Authority recently imposed higher rates on data centers seeking grid connections across its service area, while Ohio, North Carolina, and Virginia have also introduced new rate classes or regulatory rules for the sector.