NEWS: More utilities are inking safety-net deals with data centers—do they actually protect ratepayers from footing the bill?

PECO has signed at least two transmission security agreements with planned PA data centers. These require developers to put up 10-year letters of credit so PECO can recover transmission upgrade costs if the projects shrink, stall, or evaporate. ComEd and Exelon have also announced TSAs with data center developers over the past year.

The catch: PECO’s TSAs only cover long-distance transmission upgrades. They don’t shield customers from rising supply and capacity costs across PJM. 

As Base Power Company’s Travis Kavulla put it, TSAs can be “divorced from the actual incremental costs to serve data centers.” Instead, he wrote that “a better and more direct way of requiring data centers to pay for upgrades is…to actually have them do that!”