FERC Approves ComEd Data Center Transmission Agreements

FERC approved five transmission security agreements between ComEd and data center developers. Chairman Swett and Commissioner LaCerte pushed back on ratepayer concerns.

The Federal Energy Regulatory Commission on Tuesday approved five transmission security agreements between Exelon's Commonwealth Edison and data center developers in northern Illinois, laying out conditions for transmission service to facilities planned by Aligned Data Centers, Karis Critical, Monarch Rock Air, Red Energy Partners, and others.

The approvals arrived amid sharp scrutiny from consumer advocates and the Illinois attorney general's office, which had urged FERC to reject or delay the agreements over concerns that existing customers could be saddled with costs from the massive new loads. The state argued that "the safeguards in the TSA do not prevent existing customers from paying the costs caused by this large, discrete load." 

All four orders issued Feb. 17 included two identical concurrences: one from Commissioner Judy Chang, and a joint concurrence from FERC Chair Laura Swett and Commissioner David LaCerte. The agreements qualify for the Mobile-Sierra presumption of justness and reasonableness because they were negotiated at arm's length between sophisticated parties.

But Chang wrote separately to reinforce her concern "that reliance on bilaterally-negotiated agreements, particularly ones shielded from meaningful Commission review by the Mobile-Sierra presumption, may not be sufficient to ensure that customers are protected against unjust cost shifts from new large loads."  She warned that if transmission upgrade costs prove substantially higher than anticipated, "other customers may face increased costs over the long term." 

Swett and LaCerte pushed back forcefully. "Today's order conforms to this line of precedent by acknowledging ComEd's intention to seek rolled-in rate treatment to recover the costs of serving these new customers," they wrote. "The commission will always reject a rate that seriously harms the consuming public." 

ComEd maintained the agreements contain a "comprehensive package" of safeguards including committed revenue contributions, shortfall payments, and termination fees designed to protect customers whether data centers come online as scheduled or not.