A new analysis from the Brattle Group and the Lawrence Berkeley National Laboratory examines evolving electricity rate designs for large loads.
As electricity demand from data centers and other large loads grows rapidly across the United States, utilities and regulators are confronting a fundamental question: How should the costs and risks associated with serving these customers be allocated, Brattle said in a news release.
The new technical brief from experts from The Brattle Group, and Lawrence Berkeley National Laboratory, Electricity Rate Designs for Large Loads: Evolving Practices and Opportunities — 2026 Update, examines how utilities and regulators are answering that question through large-load tariffs, electric service agreements, and related frameworks.
Building on their research published in January 2025, the authors analyze a sample of 55 large-load tariffs and frameworks to identify which design elements are now established practices, which are emerging, and which are becoming less common.
The analysis finds that several protections are now well established, including minimum demand thresholds, minimum contract durations, monthly demand charges, minimum billing demand provisions, collateral requirements, direct assignment of costs, and mechanisms for customer-specific resource procurement.
At the same time, newer tariffs are increasingly incorporating provisions that more explicitly address the uncertainty associated with large-load growth.
These include:
• Study requirements to assess system impacts, infrastructure needs, costs, and timing before service begins;
• Load ramp periods that establish how quickly a customer must reach its contracted demand;
• Exit fees and capacity-reassignment provisions that address the risk of customers reducing or terminating service before utility investments are recovered;
• Hold-harmless mechanisms intended to demonstrate that existing customers are not subsidizing the costs of serving new large loads; and
• Customer-specific resource procurement options, including behind-the-meter generation and customer-led procurement arrangements.
The findings also illustrate the wide range of approaches taken across jurisdictions. For example, minimum demand thresholds in the tariffs reviewed range from 0.3 MW to 150 MW, while the median minimum contract duration among tariffs proposed since 2025 has increased to 12 years, compared with five years among earlier tariffs.
Taken together, the research shows how large-load rate design is evolving and serves as an important toolkit for addressing cost recovery, planning uncertainty, reliability, infrastructure investment, and customer-specific energy needs.
The technical brief is intended to provide regulators, utilities, large-load customers, and other stakeholders with a common foundation for evaluating these choices as electricity demand growth accelerates.
The report was authored by Natalie Mims Frick and Peter Cappers of Berkeley Lab, Goksin Kavlak, Long Lam, Ryan Hledik, and Sebastian Rotella of The Brattle Group, and Jadon Grove, formerly of The Brattle Group.
