When a data center asks for hundreds of megawatts of service, the utility may need a new substation, new transmission lines and eventually new generation. Those assets are built on forecasts and paid off over decades. If the customer arrives on schedule and uses what it contracted for, its bills cover the cost. If it arrives late, uses less or leaves early, the unrecovered cost can flow into rates paid by everyone else. A large-load tariff is a utility's or regulator's set of rules for assigning that risk to the customer that creates it.

FERC Commissioner Lindsay See described the problem in an October 2026 concurrence: ensuring "large load pays its way and that residential and small business customers aren't saddled with stranded costs if those loads don't materialize, don't take service at the expected level, or exit prematurely," Utility Dive reported. This guide explains the tools regulators use to do that, with figures from approved tariffs and pending settlements. All figures are as of October 2026, and several of these proceedings are still open.

Who counts as a large load

Each tariff starts with a threshold, and the numbers differ:

  • Ohio Power Co. (formerly doing business as AEP Ohio): its Schedule DCT process covers new data centers and expansions of 25,000 kW (25 MW) or greater, according to the utility. The Public Utilities Commission of Ohio adopted the tariff settlement on July 9, 2025, and the tariff took effect July 23, 2025.
  • Dominion Energy Virginia: the State Corporation Commission's new GS-5 rate class covers customers demanding 25 MW or more, effective January 1, 2027 (Case No. PUR-2025-00058).
  • Duke Energy in North Carolina: Duke previously applied its contract protections to loads of 100 MW or more. Its October 2026 settlement would apply to all large-load customers of 50 MW or more with an 80% load factor that sign service agreements after June 1, 2026, if regulators approve.
  • PJM Interconnection: FERC accepted PJM's definition of "Large Load," built on a 50 MW cumulative peak threshold, on October 9, 2026 (Docket ER26-3515-000).

The five tools in a large-load tariff

1. Minimum demand charges

The customer pays for a set share of its contracted capacity whether or not it uses it. Certain large-scale Dominion customers must pay at least 85% of contracted distribution and transmission demand and 60% of generation demand, the SCC said. In Michigan, DTE Electric's special contract with Google sets minimum billing demand at 80%. DTE's general D11 large-load rate sets it at 50% to 65%, according to the Michigan Public Service Commission.

2. Long contract terms

Longer terms keep the customer paying while the assets it triggered are depreciated. Dominion's large customers must sign 14-year commitments under the SCC's November 2025 biennial review order, Cardinal News reported, and the SCC's July 31, 2026 Rider T1 order lists "a 14-year term period" among the large-load tariff reforms the commission has approved. Ohio Power's initial term equals the load ramp period, up to four years, plus eight years. The DTE-Google contracts run 20 years, compared with the 5-year contracts normally required under DTE's D11 rate, the MPSC said.

3. Exit fees

Exit fees set the price of leaving early. Under Ohio Power's tariff, the customer owes minimum charges throughout the initial term. After the fifth contract year following the ramp period, it may terminate by paying an exit fee equal to 36 months of minimum charges. The DTE-Google contracts require an early termination payment equal to at least 15 years of minimum monthly charges, according to the MPSC.

4. Collateral and credit requirements

Collateral protects other customers if the large customer fails financially. Ohio Power requires a guarantee or collateral equal to 50% of total minimum charges for the full contract term. That requirement applies unless the customer has both credit ratings of at least A- (S&P) and A3 (Moody's) and cash on its audited balance sheet greater than 10 times the collateral requirement. Surety bonds are not accepted. Duke's North Carolina settlement calls for upfront deposits and security guarantees for grid upgrades that serve all customers, such as transmission lines.

5. Upfront payment for dedicated facilities

Facilities that serve only one customer can be charged to that customer directly. Under Duke's settlement, new large loads make a nonrefundable, upfront payment for grid facilities serving only them, "such as a substation to connect to the grid." In Virginia, the SCC's July 31, 2026 order in Case No. PUR-2026-00056 directed Dominion to propose a mandatory contribution in aid of construction (CIAC) for "direct connect" transmission facilities: generally the substations and lines connecting a large-load customer to the bulk transmission system. Expected transmission-charge revenue is netted against the cost, and the customer pays the remainder. Ohio Power's Letter of Agreement requires reimbursement of 100% of buildout costs if a customer cancels, or delays more than 12 months, before energization.

A worked example: Ohio's minimum demand schedule

Ohio Power's tariff page spells out the arithmetic, which makes it a useful model. Monthly billing demand is the greater of two numbers. The first is 85% of the customer's highest billing demand in the past 11 months. The second is a floor set by contract size. For 25,001 to 75,000 kW of contract capacity, the floor is 15,000 kW plus 85% of capacity above 25,000 kW. Above 75,000 kW, it is 57,500 kW plus 100% of capacity above 75,000 kW. In every case the floor may not exceed 85% of total contract capacity.

Applied to two contract sizes (DataCenterFeed's calculation from the published schedule):

  • A 50,000 kW contract has a floor of 15,000 + (0.85 × 25,000) = 36,250 kW, or 72.5% of contract capacity.
  • A 100,000 kW contract has a floor of 57,500 + 25,000 = 82,500 kW, or 82.5% of contract capacity, below the 85% cap.

During the ramp period, contract capacity must be at least 50% in year one, 65% in year two, 80% in year three and 90% in year four.

Transmission: the federal layer

Retail tariffs are set by state commissions. Transmission service is regulated by FERC, and large-load rules are now being written there too. On October 9, 2026, FERC voted 4-1 to accept Duke Energy Carolinas' large-load provisions in its network integration transmission service agreement, Utility Dive reported. New or transferred large loads must pay a "committed revenue contribution" equal to 75% of the megawatts in the load schedule for 15 years after the required network upgrades enter service. Customers that need upgrades pay a monthly charge to cover construction, which Duke reimburses with interest once the upgrades are in service. Commissioner Judy Chang dissented. She argued that the proposal's default to rolled-in rate treatment for large-load network upgrades might not adequately protect other customers (our report).

FERC went the other way on PJM the same day. It accepted only PJM's Large Load definition and registry and rejected the remaining proposals. Those included an Interim Resource Adequacy Service, which would have involved curtailing new large loads when resources are short, and rules for "Bring Your Own New Capacity" arrangements (our report).

Generation: the part still being argued

Grid connection costs are easier to assign than the cost of new power plants. Will Scott, North Carolina policy director for the Environmental Defense Fund, said in a statement to WFAE that Duke's settlement "is a step in the right direction towards making sure data centers pay the cost of grid upgrades they cause, but it fails to do the same for new power plants." North Carolina Gov. Josh Stein said the Utilities Commission "has more work to do" and should require data centers to "pay the full cost of their impact and bring their own clean energy."

Some contracts address generation directly. Under DTE's clean capacity accelerator agreement, Google pays for DTE to develop up to 1,600 MW of renewable energy and 480 MW of battery storage to serve the Van Buren Township campus, the MPSC said. Entergy Arkansas says Google will pay the full cost of the resources needed for the second phase of its West Memphis campus over the 20-year contract. Entergy adds that those resources will not be charged through the Generating Arkansas Jobs Act rider.

Tariffs versus special contracts

Utilities have used two routes. A tariff applies published terms to every customer in a class, as with Ohio Power's Schedule DCT and Dominion's GS-5. A special contract is negotiated with one customer and approved by the commission, as with DTE and Google. Duke's North Carolina settlement moves between them. New large loads must take service under a High Load Factor rate schedule, which WFAE described as repurposing an existing tariff and making it compulsory. The Environmental Defense Fund noted that some of these terms "may have been present in previous contracts, but those were highly confidential." At the federal level, the White House's March 2026 Ratepayer Protection Pledge commits the signing companies (Amazon, Google, Meta, Microsoft, OpenAI, Oracle and xAI) to negotiate separate rate structures with utilities and states and to pay those rates "whether they use the electricity or not."

How to read a large-load filing

  • Threshold and scope. The MW size, any load-factor test, whether it covers only data centers or all large loads, and whether existing customers are grandfathered.
  • Minimum bill. The percentage, and whether it applies separately to transmission, distribution and generation.
  • Term and ramp. Contract years, ramp schedule, and what happens if the utility's facilities are late.
  • Exit terms. When the customer can leave and what it pays.
  • Collateral. The amount, accepted forms, and credit-rating exemptions.
  • Direct assignment. Which facilities the customer pays for up front, and how "dedicated" is defined.
  • Generation. Whether new capacity costs are assigned to the customer or spread across rates.
  • Confidentiality. Which terms are public and which are filed under seal.

What Happens Next

Several proceedings have dated next steps. Duke Energy says the North Carolina Utilities Commission is expected to rule on its large-load settlement by mid-November 2026 (our report). The Virginia SCC's July 31, 2026 order directed Dominion to file its proposed amended line extension policy, with the mandatory CIAC for direct-connect transmission, within 90 days, a period that ends October 29, 2026. The filing goes in Case No. PUR-2026-00131, which the SCC opened on August 25, 2026; as of October 22 the docket showed no such filing, and Dominion told the commission that day that it has "worked closely with Staff" on the line extension policy changes. Dominion's GS-5 rate class, and the 85% minimum transmission demand charge reflected in the SCC's Rider T1 order, both begin January 1, 2027. FERC's October 9 PJM order requires a compliance filing within 30 days.

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