Large load customers are an asset for modernizing the grid and adding flexibility, as long as they are “integrated transparently and pay their fair share,” concludes a report released today by Concentric Energy Advisors.
However, the report said, if large load customers don’t pay their share of fixed grid costs, “the need for system upgrades remains …. [and] the resulting cost shift to other customers could total between $120 billion and $169 billion over a 30-year period nationwide” in transmission costs alone.
“The need for capital investment is increasing even without large loads, due to added system complexity and increasing extreme weather, among other reasons,” the report said. “Grid connected large loads typically help support the fixed costs of maintaining and modernizing the system.”
Utilities are making those capital investments, Concentric said, noting that the U.S. Energy Information Administration found that “annual spending by major utilities to produce and deliver electricity increased by 12% from 2003 to 2023 in real 2023 dollars.” Large-load growth allows utilities to spread their investments across a larger customer base, but the need for those investments would exist even without large loads’ presence on the grid, the report said.
U.S. electric utilities are projected to invest $239 billion this year in strengthening and expanding the power grid, according to the Edison Electric Institute, which represents investor-owned utilities. CEA prepared the report at the request of EEI.
"Our research makes clear that ongoing utility investment and integrated planning are fundamental to preserving reliability and enhancing resilience in the face of evolving demand,” Meredith Stone, assistant vice president at Concentric, said in a statement.
Large-load growth can help modernize the U.S. electric system because “the scale of these customers can justify investments in new transmission lines, substations, and modern grid technologies that improve real‑time monitoring, automation, and control,” Concentric said. In addition, large-load tariffs in some states are requiring large customers to “share in storm recovery cost and to help fund state-of-the-art new generation and reliability-driven backbone transmission investments.”
The size and interconnected nature of the U.S. power grid are a reliability asset, Concentric said, as “interconnected power systems are better able to withstand extreme weather events, localized equipment failures, and supply interruptions than isolated or off-grid systems.” The report suggests it is more beneficial to the overall grid for large loads to be integrated into it rather than rely on behind-the-meter resources.
“While on-site generation can be a potential interim solution as projects await full grid interconnection, widespread reliance on off‑grid systems is not a durable path forward,” Concentric said. “Recognizing this, major technology companies such as Amazon are actively partnering with utilities to strengthen the grid rather than bypass it.”
