Tri-State Generation and Transmission is seeking FERC’s approval for a new tariff designed to manage the heavy volume of data center load expected to materialize in its member utilities’ service territories over the next decade (ER25-3316). 

The filing is part of a growing trend among utilities and states in crafting policies to protect ratepayers from the financial — and reliability — risks stemming from the voracious energy demands of new artificial intelligence data centers. (See related story, Large-Load Tariffs Touted as Alternative to ‘Side Deals’.) 

The proposal is the product of “months of collaboration with members and stakeholders,” the Colorado-based cooperative said in an Aug. 29 press release. 

“The proposed tariff is designed to establish a repeatable and fair process for incorporating high-impact loads onto the Tri-State system without adverse impacts to reliability or affordability,” Tri-State said. “The process would allow Tri-State members to respond in a consistent manner to requests for services from heavy energy users, such as data centers.” 

“We’re in the business of providing electricity, and we are committed to doing it in a way that can meet the needs both of new loads and Tri-State members,” said Lisa Tiffin, Tri-State’s senior vice president of energy management. “This approach allows us to grow responsibly and limits the potential for stranded assets that could result in financial risk to Tri-State and our members.”   

Tri-State is a power supply cooperative that serves electric distribution cooperatives and public power districts across four states. It said in its filing with FERC that new load requests from data centers among its members would, over the next 10 years, more than double its current system peak demand of 2.5 GW. 

In the filing, Tri-State noted that data centers “support local economic development, improve the efficient utilization of utility resources and provide steady revenue streams when fully integrated into a service provider’s system.”  

But it also warned that integrating such large loads also “carries risks,” including the need to build new transmission lines and generation, and the potential for increasing interconnection queue backlogs and delays in procuring needed resources. 

“Large load interconnections also present serious reliability and cost-shifting risks for a utility’s customers,” Tri-State added. 

Tri-State’s existing Electric Resource Planning (ERP) process, designed for a more measured rate of native load growth, is not equipped to handle those risks and the expected pace of new demand from what the co-op calls high-impact load (HIL) projects, it explained in the filing. 

“HIL projects are more speculative than utility members’ prior requests for new or modified delivery points, or native load growth in general. HILs also require accelerated and significant transmission upgrades that do not fall neatly into the existing ERP process,” Tri-State said. 

‘Avoid Socializing the Risk’

Tri-State’s proposed High Impact Load Tariff (HILT) would provide an alternative planning approach for integrating those loads into its system. 

According to the filing, the “guiding principles” for the HILT are: “(1) facilitating economic development across Tri-State’s utility members’ systems at an unprecedented level and pace; (2) limiting the risk of stranded assets resulting from high-impact load integration, which could create financial risk for Tri-State and its utility members; and (3) continuing to meet all resource planning and associated regulatory requirements.” 

Modeled on similar tariffs filed by other U.S. utilities, the Tri-State HILT would establish a biennial planning cycle for customer loads rated at 45 MW or higher. 

“This separate HIL planning cycle process is necessary because HILs are of a size that require significant generation capacity additions or procurement of long-term [power purchase agreements], which necessitates proper planning. Ratepayers may suffer financial consequences if capacity additions are completed only for a HIL to not materialize,” Tri-State wrote. 

Each planning cycle would begin with a “kickoff” meeting among Tri-State, co-op members and potential HIL customers, where participants will “set forth the requirements and timing for a HIL participation package [prepared by the utility member], a process for verifying the participation package components are met and a HIL evaluation process.” 

Intended to ensure that only non-speculative projects are presented to Tri-State for study, the participation package would include:  

• • a completed member project request form; 
  • evidence that the HIL customer has at least 90% site control over its project location; 
  • payment of a nonrefundable HIL evaluation fee; 
  • a certified engineering diagram of the project’s expected load and property acreage; 
  • an executed member-customer high-impact load (MCHIL) agreement; and 
  • a high-impact load agreement (HILA) to be executed between the utility member and Tri-State. 

For HIL requests under 80 MW, the evaluation fee would start at $35,000 plus $1,000/MW, increasing to $150,000 for projects between 80 and 200 MW, and $250,000 for projects above 200 MW — levels Tri-State said are consistent with the megawatt deposit thresholds under its large generator interconnection procedures.

Tri-State said the evaluation process would focus on “reliability, economic and environmental criteria, as well as transmission metrics.” 

“The reliability review will ensure the HIL will not have an adverse impact on the reliable operation of Tri-State’s system, including compliance with Level I (base metrics) and Level II (extreme weather events) reliability metrics. The economic criteria focus on whether the HIL project is economically priced so as to minimize Tri-State’s system costs, and reduce or maintain Tri-State’s rate requirements,” the co-op said. 

The proposed HILA would include “minimum billing demand and energy floors” intended to ensure that, regardless of whether a HIL customer’s load grows as forecast, Tri-State is compensated for system upgrades sufficiently enough to avoid shifting costs to other customers. 

The HILA also would stipulate that a HIL customer provide a minimum security deposit of $2.7 million/MW to offset the risk that “the HIL customer begins commercial operations late [or] ceases operations before the expiration of the HILA term or the HIL does not operate at the expected level (or at all). In short, the security requirement enables Tri-State to avoid socializing the risk of the HIL customer’s under- or nonperformance across Tri-State’s entire membership.”