The Grid Side: Queues, Tariffs and Who Pays

A data center cannot plug in like a house. It has to ask the utility for service, wait for engineering studies, and sign a contract. In a regulated state, the terms of that contract go before the state utility commission. That process is where the money question gets settled: if the utility builds a substation, a transmission line or a power plant to serve one customer, who pays for it?

How utilities recover costs

Most of the country is served by investor-owned utilities regulated by a state commission. The basic deal is old and simple. The utility builds what the system needs. The commission decides whether the spending was prudent. If it was, the utility recovers the cost, plus an approved return on investment, from all customers through rates. A cost of service study divides those costs among customer classes: residential, small commercial, large industrial, irrigation and so on.

That model assumes growth benefits everyone, because a bigger system spreads fixed costs over more sales. A huge new customer can lower rates for others if it pays its share and stays for decades. It can raise them if the utility builds for it and the customer pays too little, shrinks or leaves. Both outcomes are possible. The contract terms decide which one happens.

Ari Peskoe and Eliza Martin of the Harvard Environmental and Energy Law Program reviewed nearly 50 regulatory proceedings in a March 2025 paper and argued that special contracts and discounted rates often shift data center costs onto other ratepayers. Utilities and the industry answer that new large-load tariffs are designed to stop exactly that. Both claims can be tested case by case, and the docket for each case is where the evidence sits.

The queue

Before any of that, a project waits in line. Generator queues are better documented than load queues. LBNL's Queued Up: 2026 Edition counted more than 2,060 GW of generation and storage seeking connection at the end of 2025. Projects built in 2025 took a median of more than five years from request to operation, and only 13 percent of capacity that applied from 2000 to 2020 had reached operation by the end of 2025. New power plants that might serve data centers face that same line.

Large loads have had less standard treatment. In October 2025 the Secretary of Energy directed the Federal Energy Regulatory Commission to consider rules for connecting loads above 20 MW directly to FERC-jurisdictional transmission (Docket RM26-4). The advance notice floated study deposits, readiness requirements and having large loads pay 100 percent of assigned network upgrades, and asked for final action by April 30, 2026. On April 16, 2026, FERC said it would act by the end of June. On June 18, 2026, instead of proposing a national rule, it issued show cause orders under Section 206 of the Federal Power Act directing six regional grid operators (PJM, MISO, SPP, CAISO, ISO New England and NYISO) to address large-load interconnection in their own rules. Idaho Power is outside those markets. Check FERC eLibrary for the latest filings before you cite a status. Retail rates stay with the states in any case.

What a large-load tariff contains

Regulators have converged on a toolkit. Not every tariff has every item, and Idaho Power's own 2026 investor slides say approved agreements are "evaluated on a case-by-case basis."

Term	What it does	Who it protects
Minimum demand charge (take-or-pay)	Customer pays for a set share of contracted capacity even if it uses less	Other customers, if the load underperforms
Long contract term	Locks in payments for 10 to 20 years	Other customers, against stranded plants
Exit or termination fee	Customer pays remaining costs if it leaves early	Other customers
Collateral or credit support	Letter of credit or guarantee scaled to project risk	Utility and customers, if the developer goes broke
Contribution in aid of construction	Customer pays up front for dedicated lines and substations	Other customers
Curtailment provisions	Utility can cut the load in emergencies	Reliability for everyone

Real proceedings, state by state

Ohio

On July 9, 2025, the Public Utilities Commission of Ohio approved AEP Ohio's data center tariff after evidentiary hearings. New data centers above 25 MW must pay for at least 85 percent of subscribed capacity regardless of use, under contracts of up to 12 years with a ramp of up to four years, plus exit fees and financial assurances. Existing sites are grandfathered unless they expand past 25 MW. The industry had backed a softer alternative. The commission sided with the utility's version.

Virginia

Virginia's Joint Legislative Audit and Review Commission estimated in 2024 that a typical Dominion residential customer's generation and transmission costs could rise $14 to $37 a month by 2040, in constant dollars, depending on how much data center growth is built. In November 2025, the State Corporation Commission created a new GS-5 class for customers of 25 MW or more, starting January 1, 2027. They pay a minimum of 85 percent of contracted transmission and distribution demand and 60 percent of generation demand. In the same order the SCC approved residential increases of $11.24 a month in 2026 and $2.36 in 2027, below Dominion's request.

Texas

Governor Greg Abbott signed Senate Bill 6 in June 2025. Loads of 75 MW or more connecting to ERCOT must accept curtailment during firm load-shed events, with shutoff equipment required to connect. The law adds a $100,000 minimum initial interconnection fee, study fees, cost-sharing rules and disclosure of duplicate requests elsewhere in the state.

Idaho

Idaho has no general large-load tariff in statute. Two 2026 bills aimed at one did not become law: SB 1368, which would have required commission approval before serving a customer adding 30 MW or more, failed according to the Idaho Conservation League tracker, and House Bill 609, which would have tied the data center sales tax exemption to rates that fully recover the utility's costs, shows no action past committee referral on the legislature's site. A 2025 bill with a 10 MW threshold, H0395, passed the House and died in a Senate committee.

The live action is at the Idaho Public Utilities Commission:

• IPC-E-26-07, filed March 31, 2026: Idaho Power's petition to review its class cost-of-service method and decide cost-of-service issues for new large-load customers. Intervenors include the Idaho Irrigation Pumpers Association, Micron, the Industrial Customers of Idaho Power, the City of Boise, the Northwest Energy Coalition, Clean Energy Opportunities for Idaho, the Federal Executive Agencies and Bayer (through its affiliate Ruveon LLC). The commission issued a notice of schedule (Order No. 37170) on September 16, and Idaho Power filed direct testimony on September 23, 2026. No decision as of the docket's October 7, 2026 update.
• IPC-E-24-44: a special contract and new Schedule 28 for Micron's memory fab, filed December 6, 2024, approved with modifications in Order No. 37039 on May 8, 2026. Order No. 37092, July 8, 2026, approved Idaho Power's compliance filing with the revised Schedule 28 and an amended contract. It is a chip plant, not a data center, but it sets the template for very large loads on this system.
• IPC-E-22-29: a 200 MW solar purchase agreement serving Brisbie LLC, a Meta affiliate building near Kuna. The application said Brisbie pays all costs of the agreement so other customers are not harmed.

Irrigators have made the cost-shift argument loudest. In a February 2026 guest column in the Idaho Capital Sun, Adam Young, a Bingham County grain and alfalfa grower, reported Idaho Power's demand charge for farmers rising from $6.94 per kW in 2021 to $16.50 in 2026 and argued that new large loads such as data centers and chip plants are the main driver. He quotes Idaho Power as pointing to increased demand and the investment it requires, and he acknowledges residential growth as well. IPC-E-26-07 is where that dispute gets tested with evidence.

Two utilities show the scale. Data centers bought 24 percent of Dominion's Virginia Power electricity sales in 2023, up from 21 percent in 2022, Dominion's 2023 annual report says. In central Washington, Grant County PUD's queue held 2,897 MW of large-load requests in August 2024, 1,568 MW of it from data centers, against a system peak near 1,050 MW (American Public Power Association). By April 2025 the PUD was capping how much more power each data center could take.