US grid watchdog objects to Maryland power plant sale, cites data center demand concerns

By Laila Kearney

NEW YORK, March 5 (Reuters) - A watchdog for the largest U.S. electrical grid urged federal regulators to reject the sale of a Maryland power plant, citing concerns that energy from the plant could be diverted for the use of data centers at a time of shrinking electricity supplies on the grid, according to a regulatory filing this week.

Rising electricity demand from data centers - both existing and forecasted - has increased power bills across regional grid PJM Interconnection, prompting the White House, governors, PJM and others to propose that data centers build or otherwise supply new power to cover their electricity use.

Monitoring Analytics, LLC, which acts as PJM's independent market monitor, objected to the sale of the Morgantown Generating Station to TeraWulf Inc, which operates as a bitcoin miner and data center developer, according to a filing with the Federal Energy Regulatory Commission on Wednesday.

TeraWulf announced the acquisition of Morgantown last month. The Maryland-based company said the power plant has about 200 megawatts of operational generation capacity, and could potentially be increased to about 1,000 megawatts, or enough to power about 750,000 homes.

It did not name a potential customer for that power or lay out other specifics of how the power plant would interact with the broader PJM market.

Monitoring Analytics said more information about plans for the Morgantown site and power units should be disclosed before the sale is approved. TeraWulf should also be required to commit to keeping the Morgantown electricity supply to the PJM market and not remove it for the use of data centers, the monitor said.

"It remains unclear whether the proposed expansion relies on reactivating retired units, constructing entirely new generation, or modifying existing interconnection rights," Monitoring Analytics said in its filing with FERC. "Without this information, it is impossible to evaluate whether the project will in fact contribute incremental supply to the grid."