Illinois utility Commonwealth Edison recently announced the first set of new Transmission Security Agreements (TSAs) “designed to protect customers and ensure fairness in the cost of connecting and providing transmission service to new large loads requesting service from the grid.”
These agreements “help safeguard existing customers from bearing costs of serving proposed large load projects and ensure that those new projects pay their fair share even if they do not fully materialize,” the utility said.
The agreements include revenue commitments tied to the transmission services requested by eight large customers that represent a forecasted new load greater than 6.5 GW.
Together, the eight agreements will prevent existing ComEd customers from bearing responsibility for more than $2 billion in transmission charges over a 10-year period, it said.
Under the TSAs, all existing customers are protected from transmission service costs that should be absorbed by new large load projects, even if those projects do not meet their expected load.
Without the TSA, other customers might bear those costs, while under the TSA, the large load applicant will cover the shortfall and the TSA payments the applicant makes will reduce, on a dollar-for-dollar basis, the costs other customers would have to cover. "This approach underscores ComEd’s commitment to safeguarding existing customers from unfair financial impact in northern Illinois."
“These new transmission security agreements are a model for how utilities and the developers of large load projects -- regardless of industry sector -- can come together to meet growing power requests responsibly,” said Gil Quiniones, President and CEO of ComEd. “By having TSAs in place, ComEd can better ensure that the customers who impose very large demands on the system are paying their fair share.”
As part of the TSAs, ComEd will require a firm financial commitment from developers of projects 50-MW or above. This “take or pay” agreement requires collateral for 10 years of transmission service revenues according to the load requirements that ComEd is being asked to serve.
“As the world’s largest data center developer, provider, and operator, we understand the challenge of meeting rapidly growing digital demands while keeping power costs affordable,” said Adrian Anderson, SVP Global Energy for Equinix. “Northern Illinois remains a key market for continued growth, which is why we’re proud to partner with ComEd on this initiative to bring greater transparency to the development process as we continue to drive growth and job creation across all our sites.”
The new TSA provides a replicable approach that will be used for future large load requests, and reduces speculative projects, which will also help ensure that ComEd makes the right levels of investment needed to serve new large loads while upholding system reliability, the investor-owned utility said.
"Rightsizing ComEd’s pipeline of large load requests and reducing speculative projects are essential steps as future load projections influence energy supply costs in the wholesale power markets," it said.
"The new TSAs are just the latest example of how ComEd is acting to protect its existing customers as supply prices continue to rise—from expanding financial assistance options for its hardest hit customers, to advocating for new generation to come online to meet the growing level of demand. ComEd also proposed a series of retail large load tariff modifications currently before the Illinois Commerce Commission (ICC)."
The tariff modifications would require higher initial application deposits and larger deposit requirements for the company’s electrical infrastructure installed on a new customer’s property if they do not meet their load request or cover the associated revenue requirement. A decision by the ICC is expected early this year.
