| Resource Type | Report |
| Author / Source | Jeffrey Sward, Lauren Shwisberg, Katerina Stephan, Jacob Becker (RMI) |
| Publication Date | February 2025 |
| Location | United States (case studies from VA, NC, GA) |
| Initiative Type | Policy, Technology |
| Project Complexity | Advanced |
| Recommended For | Staff, Board |
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Estimated reading time: 30+ minutes
Why This Matters for Rural Electric Co-ops
This report proposes new regulatory approaches to improve how utilities forecast and plan for large emerging loads like AI-driven data centers and advanced manufacturing. As these facilities increasingly seek rural sites, rural co-ops may find themselves at the center of significant load growth without the tools to manage the risk.
Over-investment driven by loads that never materialize creates stranded asset risk for all members; under-investment risks reliability failures. Co-op staff and G&T partners can use this resource to evaluate whether current planning processes are equipped for large load inquiries and to advocate for tariff and forecasting practices that protect members.
Key Takeaways
| › | Data centers and large industrial loads have unique characteristics, including load shape, flexibility potential, and flight risk, that standard IRP forecasting methods weren't built to capture. Co-ops and G&T partners need updated approaches. |
| › | Utilities have historically over-forecast by 8–17%, and cost-of-service incentives reinforce over-investment. Co-ops should scrutinize G&T capital plans tied to large load growth. |
| › | Tariffs requiring upfront collateral, contracted demand, and exit fees can protect existing members from stranded infrastructure costs. Several states have already adopted such structures. |
| › | Scenario-based forecasting presents load as a range rather than a single value, enabling better distinction between required and imprudent investments. Co-ops should ask whether G&T forecasts reflect this approach. |
Implementation Considerations
- Cost or Funding Requirements: Developing separate large load forecasts and updated tariff structures requires expertise smaller co-ops typically don't have in-house. The most actionable path is advocating through G&T relationships and statewide associations for the practices described in this report.
- Regulatory or Governance Considerations: Though directed primarily at IOU regulators, this report's recommendations are directly relevant to co-ops operating under G&T contracts or in RTO/ISO markets. Regulatory decisions on large load tariffs and forecasting standards made at the state level directly affect co-op member rates and risk exposure.
Notable Examples
- Dominion Energy (Virginia): Multi-scenario data center forecast; projected data center load exceeded total ERCOT actual load growth, illustrating scale of risk.
- Duke Energy (North Carolina): First applied economic development adjustment to IRP in 2023; required by commission to report semiannually on large load pipeline.
- Georgia Power: Quarterly large load pipeline reporting; 36.5 GW pipeline as of September 2024; commission approved risk-based billing for loads above 100 MW.
- AEP Ohio: Data centers over 25 MW must pay 85% of expected monthly energy use and exit fees if contracts aren't met.
- Indiana & Michigan Power: Large load customers must pay collateral equal to 24 months of expected non-fuel bills, shifting stranded asset risk to the customer.
View Full Document Requires name and email to access
Estimated reading time: 30+ minutes
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