Large Load Tariff

A large load tariff is a utility rate class setting the terms on which very large customers, such as data centers, connect to the grid and buy power. Typical provisions include minimum-demand charges, long contract terms of 10 to 20 years, collateral requirements and exit fees, designed so that other ratepayers do not carry the cost of network upgrades built for one campus. Several US utilities and state regulators have adopted or proposed such tariffs for loads above roughly 20 to 100 MW as data center requests surged. The details differ by jurisdiction, so the effective price and the speed of connection depend on the local tariff as much as on the energy price itself. For operators, the tariff shapes site selection and the risk of paying for capacity that is not used.