Dive Brief:
- More utilities are asking prospective large-load customers to pay upfront for system impact studies, ramp up to full load within a set number of months and pay an exit fee if they stop or significantly reduce service before their contract expires, according to a recent technical brief prepared by researchers with Lawrence Berkeley National Laboratory and the Brattle Group.
- These “emerging” practices have become more common in the 18 months since the researchers last surveyed the large-load tariff landscape. They join eight “established” practices that already feature in most large-load tariffs, such as minimum contract durations, minimum billing demand and collateral requirements, the researchers said.
- The researchers developed the brief using Halcyon’s large-load tariff tracker, which as of Aug. 17 had catalogued 264 tariff filings involving data centers, advanced manufacturing facilities and other large industrial customers. Halcyon’s data shows the number of active and proposed large-load tariffs has increased sharply since early 2025, as has the average qualifying demand threshold for covered customers.
Dive Insight:
Utilities and state regulators across the country have turned to specially crafted large load rate structures in an attempt to protect existing ratepayers from shoulding the costs of data centers – or at least contain some of the public backlash.
The LBNL and Brattle researchers analyzed a subset of 55 tariffs in Halcyon’s tracker and isolated 18 elements that utilities use to mitigate financial, planning and operational risks while supporting broader power system goals, they said.
The brief organizes the elements into four categories based on how common they are in practice and whether their use is increasing, decreasing or remaining stable over time.
The eight “established” elements have appeared in more than two-thirds of large-load tariffs since before the January 2025 analysis, according to the brief. Five of the eight hold customers to some form of minimum commitment, whether in contract duration or amount paid to the utility.
These elements vary significantly in practice, however.
For example, while every tariff the researchers examined in 2026 required customers to exceed a minimum demand threshold, that value ranged from less than 1 MW to 150 MW, Natalie Mims Frick, leader of the energy markets and planning department at LBNL, said in a presentation Wednesday.
Some tariffs measure thresholds in the aggregate — meaning cumulative loads across multiple customer sites — while others measure them site by site, Frick added.
Minimum contract duration likewise varied significantly. The minimum contract period for Entergy Louisiana’s “Large Power, High Load Factor Power Service Rate” is five years, the researchers said, while El Paso Electric’s proposed “High Load Factor Power Service” has a minimum duration of 20 years.
Overall, the trend has been toward longer minimum durations. Tariffs proposed before 2025 had average minimums of five years, while those proposed after 2025 had average minimums of 12 years, according to the brief.
The five “emerging” elements appear in as many as two-thirds of recent tariffs and are becoming more common over time, the researchers found. Those elements include requirements that customers pay upfront for system impact studies, in some cases through nonrefundable deposits; ramp up to full contract load within a predetermined period that may or may not overlap with the minimum service contract duration; make up any shortfall between recovered costs and actual costs to serve through a “hold harmless” provision; meet certain conditions if they wish to resize their contracted load without exiting altogether; and pay a substantial exit fee to terminate a contract early.
The brief categorized four additional elements as stable, meaning they are relatively common and have seen little increase or decrease in frequency over the past 18 months: rules governing the minimum average load threshold customers must maintain during a set period, often seasonally or annually; whether and how a single customer may aggregate its cumulative load across multiple sites; whether customers must provide forward guidance on demand; and “price premiums” that ensure customers pay at least the actual cost of service and in some cases provide additional payments to subsidize other customer classes.
Only one element appeared to be declining: tariff provisions that specify the type of customer that may take service under a large-load tariff, which the researchers said can be driven by legislation or the imperative to maintain non-discriminatory rate design.
