FERC Accepts Duke’s 75%, 15-Year Floor on Large-Load Transmission Costs, and a Commissioner Calls It the Low End
- FERC & Federal Policy & Markets Regulatory
Marin Holt
- 0
- 8 minutes read
- Committed Revenue Contribution floor: 75%
- Floor term: 15 years
- FERC docket: ER26-2691
- Load in the rejected Lockhart deal: 200 MW
- Upgrades that deal triggered: $40 million
Federal regulators accepted new Duke Energy Carolinas rules for large-load transmission upgrades. The rules cover data centers and other large loads in North and South Carolina. The core safeguard is a Committed Revenue Contribution. A transmission customer that serves a large load must pay for at least 75% of its planned load. The floor lasts 15 years, even if the actual load comes in lower.
The Federal Energy Regulatory Commission acted in docket ER26-2691. Commissioner Lindsay See filed a concurrence dated October 9, 2026. RTO Insider reported on October 12 that three commissioners agreed the industry needs more reforms. The aim is to stop large-load costs from shifting to other customers.
What FERC accepted
The order accepts safeguards that Duke wrote into its pro forma Network Integration Transmission Service Agreement. It also codifies rolled-in rate treatment as the default for network upgrades that large loads drive. Under rolled-in pricing, upgrade costs go into the rate that every network customer pays.
FERC policy still lets a transmission provider charge the higher of the rolled-in rate or an incremental rate. See urged Duke to use that option. Where a large load drives upgrade costs well beyond the norm, See wrote that Duke should file a non-conforming agreement with an incremental rate.
Why It Matters
Paying for 75% of the planned load amount turns a data center’s load forecast into a payment obligation. If a campus takes service at half its planned size, its transmission customer still pays for 75% of the plan for 15 years. That protects residential and small business customers from stranded transmission costs. The protection lasts only while the customer stays solvent. Developers that want service in Duke territory should treat the floor as a fixed cost in their site economics.
What See said is missing
See called the proposal “an incremental improvement, not a slam dunk.” In See’s view, a 75% contribution sits near the low end of what is just and reasonable. Duke did not require large-load customers to post financial security at a matching scale. Without that security, a bankrupt customer leaves other ratepayers to pay for upgrades they did not cause.
See also limited the reach of the order. Duke filed under Federal Power Act section 205, where FERC reviews a utility’s own proposal. See wrote that the decision does not prejudge outcomes in the June 2026 Large Load Show Cause Order proceedings.
The deal FERC rejected first
The new rules follow a December 23, 2025 FERC order that rejected an amended agreement between Duke Energy Carolinas and Lockhart Power. Lockhart sought service for an additional 200 MW of load. That load triggered about $40 million in transmission upgrades.
The rejected agreement charged an incremental rate for five years. Rao Konidena, an independent analyst, put that rate at $4.11/kW-month against an embedded rate of $2.66/kW-month. Rollover rights then let Lockhart keep the service without paying for it. Commissioner Judy Chang wrote that this outcome would unacceptably shift costs to other transmission customers.
North Carolina regulators are working the same problem at the retail level. Duke is negotiating a separate large-load settlement with state regulators.
Critical Perspective
FERC accepted a floor of 75% of planned load for 15 years, and Commissioner See wrote that 75% sits near the low end of what is just and reasonable. On October 9 FERC also rejected the curtail-first core of the PJM Interconnection large-load plan and kept only its 50 MW definition and a registry, so Duke and PJM now carry large-load cost risk under different federal answers. The Lockhart Power agreement that FERC rejected in December 2025 shows the pattern this rule targets: a 200 MW load would have paid an incremental rate for five years and then kept its rollover service for free. If a data center customer goes bankrupt in year six, how much of the remaining floor can Duke collect when its proposal sets no financial security at a large-load scale?
Sources
- FERC, Commissioner See’s Concurrence in Duke Energy Carolinas, LLC, Docket Nos. ER26-2691-000 and ER26-2691-001
- RTO Insider, FERC OKs Duke Energy Carolinas’ Large Load Network Upgrade Rules
- FERC, Commissioner Chang’s Concurrence Regarding Duke Energy Carolinas, ER26-65-000
- Rao Konidena, Duke’s Existing Customers Just Dodged a Bullet (Thanks, FERC)
