Ratemaking for Data Centers & Other Large Power Loads

The power industry is confronting an abrupt large, targeted, and disparate load growth like no other time in recent memory. After decades of stagnant and limited load growth, data centers, AI, cryptocurrency miners, and other technology-based individual large loads are driving demand for significant amounts of electricity capacity across the country. These new single large loads are posing significant service, power supply, infrastructure, and risk-related issues for electric utilities in particular.

The scale, often 100MW to 500MW or more per site, and types of services — e.g., firm full service, non-firm, or standby — create unique issues and risks for small to large and investor-owned, municipal and cooperative utilities. These loads instantly add anywhere from 10 percent up to even 200 percent of the current system’s demand, whereas utilities are most comfortable making incremental capital investments that bring 30 years or more of certainty along with them. 

Among the multiple challenges confronting these utilities is how to address the cost and revenue consequences of incorporating these large loads into their existing systems.  This training seminar will examine such issues, including:

• Large load and customer types (such as hyperscalers/IT companies, developers, and crypto), and the related operations, risks, and service requirements that must be considered by the utility
• How several utilities have developed standard approaches and cost recovery mechanisms to balance the development of the infrastructure and power supply needs required to serve these customers with their specific risk profile and applicable jurisdictional authority (e.g., state commission, local board, city council)
• How these customer types are currently being served in the different types of power market structures, including regional markets, bilateral markets and vertically integrated balancing areas
• Detailed examples and discussion of the infrastructure cost recovery, capacity and energy procurement, and operations options to integrate in the contract or tariff development

• Describe large load and customer types and the related operations, risks, and service requirements that must be considered by utilities
• Review the power grid requirements, hurdles and barriers that challenge aggressive data center development
• Evaluate financing, coordination and timing of grid infrastructure upgrades
• Identify measures to limit the impact of hyperscale data centers, AI and large loads on other customer category rates
• Examine how these customer types are currently being served in the different types of power market structures
• Discuss formulating rate designs for data centers
• Assess infrastructure cost recovery, capacity and energy procurement, and operations options to integrate in the contract or tariff development
• Apply rate-making concepts to typical data center and large load scenarios through course exercises