Who Pays for the Wires
Every new substation and transmission line built for a large customer has to be paid for by someone, over decades. If that customer shrinks or leaves, the bill falls on everyone else. Ohio and Virginia answered with minimum bills and long contracts, Texas with a statute, and PJM's capacity market shows how regional forecasts can spread costs to households that never see a data center. Faraday's read: a settled rule about who pays is worth more to a jurisdiction than a generous one, because it lets utilities say yes without starting a fresh political argument each time a large load asks to connect. The terms are rarely kind to developers. They are, however, knowable, and knowable terms can be financed.
Knowledge check
What problem are minimum demand charges in large-load tariffs, such as those approved for AEP Ohio and Dominion Energy Virginia, designed to address?
Show the answer
They address stranded cost risk: the danger that a utility builds infrastructure for a large customer who later uses less power or leaves, leaving other customers to cover the cost. By requiring payment for most of the contracted capacity over a long term, the tariff shifts that risk to the customer who created it.