(This paper is part of the series Data Centers and the Next Era of Energy Regulation. Find an overview and all the related resources on the series page here.)
As natural monopolies that provide an essential service, electric utilities have long been subject to special legal obligations, including a duty to serve all customers who apply for electric service on equal terms. But utility service obligations are not static. They have changed as the policy context has shifted, and they must continue to evolve as data centers drive rapid load growth and challenge utilities’ ability to provide safe, reliable service at just and reasonable rates. This paper identifies four strategies for adapting utility service obligations to the large load era:
- Investigate utility service obligations given data center developments. When investigating the impacts of large loads, states can evaluate how utility service obligations apply to data centers.
- Define or clarify limitations on the obligation to extend service. States can clarify that utilities can delay or deny service when they lack adequate resources or reasonable certainty that forecasted load will materialize.
- Strengthen interruptible service. States can make voluntary interruptible service options more robust or mandate interruptible service for specific large load customers.
- Define conditions for expedited service connections. States can give developers confidence that they can connect quickly by allowing utilities to expedite connections that do not harm existing customers.
