ICC approves ComEd proposal requiring multimillion dollar deposits for new data center projects

The Illinois Commerce Commission (ICC) has approved a proposal by utility ComEd to implement new tariff provisions, requiring increased deposits from data center developers. This measure aims to safeguard ratepayers from bearing the costs of multi-million dollar data center projects that are initiated but not fully completed or do not operate at projected demand. ICC Chairman Doug Scott stated these modifications are a crucial initial step in addressing the impact of Large Demand Project Applicants and Customers (LDPAC) on the state's electrical grid. The new rules stipulate scaled-up application deposits, starting at $1 million per data center project, with additional requirements for infrastructure buildout, potentially reaching tens of millions of dollars for new substations and transmission connections. For projects of 50 megawatts and above, an additional $500,000 deposit is required for every 100-megawatt increment over 200 megawatts. Developers would largely recover these deposits over 10 years if projects proceed as planned; otherwise, ComEd would retain the funds to compensate ratepayers for unused infrastructure. ComEd reported an "unprecedented surge" in large service requests since 2019, with approximately 100 data center projects currently in its development pipeline. These projects could collectively represent 35,000 megawatts of demand, potentially more than doubling ComEd's peak electricity demand over the next 15 years. The utility noted that increased data center demand has contributed to a sharp rise in electricity supply charges for its 4.1 million northern Illinois customers. In addition to these tariff changes, ComEd has launched a Federal Energy Regulatory Commission (FERC)-approved initiative involving Transmission Security Agreements. Eight such agreements have already been made with large-load customers, primarily data centers, to ensure developers, rather than residential customers, cover over $2 billion in transmission charges over a decade. The ICC has also ordered an investigation to develop further policies to protect ComEd ratepayers from excessive costs related to large load projects, with an order expected within eight months. Brad Klein, managing attorney for the Environmental Law and Policy Center, welcomed the commission's urgency, emphasizing the need for data centers to bring their own clean energy and grid solutions.