PUC advances model tariff to manage data center boom

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The Pennsylvania Public Utility Commission is working to make sure the state is managing increased energy demand and protecting ratepayers from the rapid expansion of large load customers, including data centers. 

 The commission has advanced a proposed model tariff for large load customers by voting 5-0 to adopt a motion from Chairman Steve DeFrank modifying a draft final order under consideration at a public meeting on Thursday. 

The PUC said the model tariff follows extensive review and input from stakeholders representing utilities, large load customers, consumer advocates, policymakers, and community organizations.  

Because the commission adopted a motion modifying the draft final order, a revised final order incorporating those changes will be issued in the coming days.

“This is an unprecedented time for our electrical grid – one that presents both significant challenges and important opportunities,” said DeFrank. “Data centers and advanced manufacturing are driving a level of load growth that we have not seen in generations. This action represents an important step toward establishing clear rules that support economic development while ensuring that existing customers are protected from unnecessary costs.” 

DeFrank said the model tariff is designed to provide guidance to Pennsylvania’s electric distribution companies as they evaluate and serve new large load customers, with a focus on transparency, consistency, and long-term system planning.

The model tariff addresses several key areas, including establishing guidance for identifying customers with significant electricity demand that may have a material impact on the grid.  

Tariff provisions will apply to customers over 50 MW individually or 100 MW in the aggregate. 

It also addresses the principle that customers driving new infrastructure needs should be responsible for the associated costs, helping to reduce the risk of cost shifting to existing residential and small business customers. 

It also incorporates requirements for deposits, collateral, and other financial assurances in amounts sufficient to fully cover infrastructure upgrade costs in order to mitigate the risk of stranded costs from projects that do not proceed or do not meet projected demand.

The revised final order, which will include the full details of the model tariff and the modifications adopted by Thursday’s motion, is expected to be released following completion of the commission’s standard post-meeting review and drafting process. 

 The model tariff will serve as a framework for Pennsylvania’s EDCs, which may incorporate these guidelines into utility-specific tariff filings and future rate proceedings, subject to commission review and approval.