Leveraging Large Load Flexibility to Facilitate Access to Power While Protecting Customers: Considerations for State Regulators

Abstract

Rapid electricity demand growth from data centers and other large loads threatens grid reliability and affordability. Utilities typically build generation and grid capacity to serve all loads at all times, spreading costs across all customers. This approach is too slow and expensive to meet the pace of demand. Large load flexibility offers a solution. Large loads that commit to curtail consumption when directed—backed by energy storage, on-site generation, or operational curtailment capabilities—can interconnect faster and at lower cost. To take advantage of this opportunity, this policy brief recommends that states define flexible large load as a class and then implement that definition across four policy domains: (1) the load interconnection process, (2) ratemaking, (3) load forecasting and planning, and (4) bring-your-own-capacity (BYOC) policies.