Docket Nos. ER26-2691-000 ER26-2691-001
Today’s order involves one of the most pressing cost allocation issues we face: how to ensure 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. I concur in today’s order because the safeguards Duke Energy Carolinas, LLC (DEC) memorializes in its pro forma Network Integration Transmission Service Agreement fall within the range of just and reasonable. Though not perfect, they will help protect existing customers from the impacts of large loads—and they are better than the status quo’s alternative that leaves those customers wholly exposed. I write separately to urge DEC to continue looking out for existing customers’ interests as it applies (and potentially further modifies) this policy in the months and years ahead.
The electric industry is in the midst of transformative change, and our regulatory framework must keep pace. Meeting growing demand, including from large loads, requires substantial investment in the grid. But as we build the infrastructure needed to serve growing demand, we must ensure that the customers driving new costs bear appropriate responsibility for them.
Long-familiar transmission pricing policies, including rolled-in rates, may be a viable tool to help achieve that goal by requiring large loads to pay for a significant share of system upgrades. They do not, however, address what happens when anticipated demand from large loads fails to materialize or grows more slowly than expected. So we need strong and tailored protections to ensure that existing ratepayers are not left paying for investments built for someone else.
DEC’s proposal helps address that risk: the Committed Revenue Contribution mechanism will ensure that the transmission customer serving large loads pays for at least 75% of the planned load amount for 15 years, even if the actual load ends up being lower.1 To my mind, this proposal is an incremental improvement, not a slam dunk. For example, a Committed Revenue Contribution of 75% may be near the low end of what’s just and reasonable to protect other customers. DEC also could have further strengthened its approach by requiring transmission customers serving large loads to back up their payment obligations with financial security at a large load-worthy scale. That additional step would ensure that if the transmission customer serving large loads goes bankrupt, other ratepayers will not be stuck paying for grid upgrades they did not cause.
But here is where our standard of review matters. To date, the Commission has taken up questions like these in the context of Mobile-Sierra protected agreements, where we presume they pass legal muster absent evidence they “seriously harm the public interest.”2 DEC’s proposal for today came to us under FPA section 205—which allows more searching review, but still keeps the Commission statutorily bound to a reactive role in assessing if DEC hit the just-and-reasonable zone.3 And in that section 205 posture, I believe DEC satisfied the statutory standard with its improvement over the status quo and its 75 percent-floor, 15-year assurances. (To be clear, incremental gains may not be enough in a section 206 posture where the Commission affirmatively sets a replacement rate. So today’s decision in no way prejudges acceptable outcomes in the June 2026 Large Load Show Cause Order proceedings.4)
Implicit in recognizing a zone of potential solutions is the idea that no one-size-fits-all answer likely exists when it comes to the “right” customer protection measures. Even so, just and reasonable rates require a meaningful commitment from the large load customer (often through the transmission customer serving them) to mitigate stranded asset risks. And though today’s proposal does that, there’s more DEC can and should do to protect all of its customers as it applies the new policy case-by-case.
For one, as the order recognizes, DEC should avail itself of the flexibility our transmission pricing policy affords. Today we accept DEC’s proposal to codify rolled-in rate treatment as the default for large load-driven network upgrades because it is consistent with our current transmission pricing policy, which gives transmission providers the option to charge either rolled-in rates or, if higher, the incremental rate. But I urge DEC to remain watchful. A primary goal of our “higher of” policy is to allow transmission providers to charge the higher incremental rate when doing so would hold native load customers harmless from system expansion costs.5 There may well be circumstances where large load requests drive significant network upgrade costs well beyond the norm, and rolling those costs into the rate everyone pays would raise rates for existing customers. In those cases, DEC’s ratepayers would be better served by DEC filing a non-conforming agreement to charge an incremental rate, with a supporting record explaining why deviating from the pro forma we accept today is necessary to protect its existing customers in that specific case.6 Doing so would not only put to proper use the flexibility in current Commission policy to protect customers, but also better uphold the commitments Duke made when it signed the Ratepayer Protection Pledge to keep large load costs with large load customers.7
Additionally, as the Commission explained in the Show Cause Orders (and as I highlighted in my separate statements8), we can have more confidence that rolled-in rate treatment works for existing ratepayers if transmission providers are vigilant about using the most cost-effective options for upgrading the grid. There, we preliminarily required transmission owners in RTO and ISO regions to evaluate whether Alternative Transmission Technologies can meet system upgrade needs driven by large loads, and to demonstrate why traditional upgrades are preferable if they choose not to go with ATTs in whole or in part.9 DEC is not currently subject to that obligation, but I strongly urge them to take on the customer-forward charge regardless. Building out the grid our country needs is necessarily expensive. Making cost-conscious and accountable choices about the type of upgrades to meet new loads’ needs could not matter more.
I appreciate the initial steps DEC has taken in this filing to protect existing customers from the cost implications as large loads continue entering the system. Also true: that work remains ongoing, including every time it applies these protections in practice.
For these reasons, I respectfully concur.
- 1Duke Energy Carolinas, LLC, [OSEC, PLEASE INSERT CITE] at P 35 (2026).
- 2PECO Energy Co., 193 FERC ¶ 61,148 at P 28 (2025); see also, e.g., Commonwealth Edison Co., 194 FERC ¶ 61,109 (2026).
- 3See MISO Transmission Owners v. FERC, 45 F.4th 248, 253 (D.C. Cir. 2022); Advanced Energy Mgmt. All. v. FERC, 860 F.3d 656, 662 (D.C. Cir. 2017) (discussing the Commission’s “passive and reactive” role under FPA section 205).
- 4PJM Interconnection, L.L.C., 195 FERC ¶ 61,211, errata notice, 196 FERC ¶ 61,122 (2026); Sw. Power Pool, Inc., 195 FERC ¶ 61,213 (2026); N.Y. Indep. Sys. Operator, Inc., 195 FERC ¶ 61,216 (2026); Midcontinent Indep. Sys. Operator, Inc., 195 FERC ¶ 61,212, errata notice, 196 FERC ¶ 61,123 (2026); Cal. Indep. Sys. Operator Corp., 195 FERC ¶ 61,214 (2026); ISO New Eng. Inc., 195 FERC ¶ 61,215, errata notice, 196 FERC ¶ 61,012 (2026).
- 5Inquiry Concerning the Commission’s Pricing Policy for Transmission Servs. Provided by Pub. Utils. Under the Fed. Power Act, 59 FR 55031 at n.7 (Nov. 3, 1994), FERC Stats. and Regs. ¶ 31,005 (1994).
- 6The Commission on a case-by-case basis “analyzes proposed deviations from pro forma agreements to ensure that operational or other reasons make the non-conforming provisions necessary,” such as “address[ing] specific reliability concerns, novel legal issues, or other unique factors.” See, e.g., Duke Energy Carolinas, LLC, 193 FERC ¶ 61,237 at P 19 (2025). See also Preventing Undue Discrimination & Preference in Transmission Serv., Order No. 890, 118 FERC ¶ 61,119 at PP 870, 884, order on reh’g, Order No. 890-A, 121 FERC ¶ 61,297 (2007), order on reh’g, Order No. 890-B, 123 FERC ¶ 61,299 (2008), order on reh’g, Order No. 890-C, 126 FERC ¶ 61,228, order on clarification, Order No. 890-D, 129 FERC ¶ 61,126 (2009).
- 7Exec. Off. of the President, Ratepayer Protection Pledge (Mar. 4, 2026), https://www.whitehouse.gov/releases/2026/03/ratepayer-protection-pledge/ (“Companies will pay for all new power delivery infrastructure upgrades required to service their data centers, including adequate network upgrade costs to ensure that these expenses are not passed on to the ordinary household.”).
- 8See, e.g., PJM Interconnection, L.L.C., 195 FERC ¶ 61,211 (2026) (See, Comm’r, concurring at PP 7-8).
- 9See, e.g., PJM Interconnection, L.L.C., 195 FERC ¶ 61,211 at PP 61-62 (2026).