Governor Moore “Disappointed” in PSC Data Center Decision, Working on Legislative Remedy

Amidst regulatory uncertainty, Governor Wes Moore said he is “disappointed” with a Maryland Public Service Commission decision to deny an exemption for Aligned Data Centers to install 168 backup diesel generators at the Quantum Frederick data center community in Frederick County.

In response to the PSC decision, Aligned Data Centers, which planned to build four data centers on Quantum Loophole’s Frederick campus, announced it would not proceed with the project.

In a letter to the PSC, Aligned warns “that the Commission’s initial decision and order on rehearing have sent a negative – and perhaps fatal – signal to the hoped-for data center industry in Maryland.”

As previously reported on Conduit Street, a new study found that the Quantum Frederick data center project represents an investment of nearly $30 billion in Frederick County, supporting high-paying jobs for thousands of Marylanders while significantly augmenting local and state-level tax revenues. However, mixed signals from state policymakers are raising concerns about the industry’s viability in Maryland.

According to the Frederick News-Post, Governor Moore plans to work with the Maryland General Assembly to address regulatory uncertainty on data centers.

“Projects that diversify our economy and drive growth are what we need in Maryland. We must support and partner with emerging industries as they look to expand into our communities,” Moore said in a statement to The Frederick News-Post. “I will work with the legislature to address the industry’s needs and ensure the industry has a bright future in Maryland.”

In June 2021, Quantum Loophole, Inc. acquired over 2,100+ acres of land in Frederick County, Maryland. This site was formerly known as the Alcoa property and is identified as a growth area in the Livable Frederick Master Plan (LFMP). Quantum Loophole is the developer of the first-of-its-kind, master-planned data center community, Quantum Frederick.

Construction began in 2022, but the Maryland Department of the Environment in May revoked Quantum Loophole’s environmental management plan, citing numerous work and environmental concerns. Quantum Loophole is working with MDE to address concerns and move the project forward. Still, the PSC’s decision could hinder Maryland’s ability to attract investment from the burgeoning data center industry.

Local governments, just like the State, have a vested interest in economic development. Local economic growth creates jobs and increases salaries, expanding the tax base both locally and statewide.

As such, in 2020, MACo successfully supported legislation to enable tax incentives to increase Maryland’s competitiveness as a host of data centers, as the clustering of data centers, related businesses, and skilled workers could lead to additional infrastructure investments, including expanding high-speed internet service to underserved areas of the state.

Stay tuned to Conduit Street for more information.