FERC approves Duke Energy Carolinas large-load rules with 15-year revenue terms

FERC approved Duke Energy Carolinas' large-load transmission rules, requiring new or transferred large loads to pay a committed revenue contribution for 15 years after the network upgrades serving them enter service. Utility Dive reported the approval on Oct. 13.

Under the approved provisions, FERC said the committed revenue contribution equals 75% of the megawatt value in the load schedule for each applicable month and year for 15 years after the upgrades enter service. The terms go into the utility's pro forma network integration transmission service agreement, which Duke proposed revising on May 29 in response to growing large-load activity on its system.

A transmission customer that requires network upgrades to serve a new or transferred load also pays a monthly charge to cover the cost of building them. Once the upgrades are in service, Duke reimburses that customer for the costs plus interest, FERC said.

The commission encouraged Duke to do more to protect existing customers from possible cost shifts, suggesting the utility consider individualized network integration agreements that offer greater protection than the pro forma agreement, or propose additional consumer protections to the just-approved document. "We encourage transmission providers — including [Duke Energy Carolinas] — to continually reevaluate their study processes and transmission service agreements," FERC said.

In his concurrence, Commissioner David Rosner called Duke's proposal "meaningful, if imperfect, new protections" and said consumer protections are "inadequate across the country."

The approval lands as FERC awaits proposals from regional transmission organizations and independent system operators, due next month, for beefing up their processes for interconnecting large loads such as data centers. Those filings respond to "show cause" orders the agency issued in June, which found RTO and ISO large-load interconnection rules appear inadequate, including for shielding existing customers from cost shifts when large loads require grid upgrades. The show cause orders do not cover Duke Energy Carolinas or other transmission owners outside RTOs and ISOs. Duke has about 3 million retail customers in the Carolinas.

As this publication reported in September, the data center buildout's power schedule is now a question of tariff design, and how a tariff allocates network-upgrade costs is what a load developer is underwriting long before a megawatt is delivered.