A new policy brief from energy policy experts details how states could facilitate access to power for data centers and other large loads while protecting existing customers.
Rapid electricity demand growth from data centers and other large loads is straining grid reliability and energy affordability for existing customers, and traditional utility planning approaches are proving too slow and costly to keep pace. While federal regulators consider new rules for interconnection of large loads, Duke University scholars and attorneys at Roselle LLP are providing the most comprehensive guidance to-date for states to leverage large load flexibility as a solution.
Load flexibility involves a binding, enforceable commitment from a large electricity customer to reduce its energy use when directed by a utility or grid operator, usually when demand peaks. During that time, these large loads could either curtail their operations or switch to their own on-site energy storage or generation.
“When we published the Rethinking Load Growth report last year, we identified an incredible opportunity for load flexibility to expeditiously enable the connection of new large loads using infrastructure we’ve already built,” said Tim Profeta, executive in residence at Duke University’s Nicholas Institute for Energy, Environment & Sustainability. “The next step is to demonstrate how flexibility can be brought to fruition.
“State leaders have a central role in doing this,” Profeta added. “This new brief provides them with policy tools to help large customers connect to the grid faster, protect existing ratepayers from bearing costs they did not cause and position their states to attract the economic development that large energy users bring.”
Here are five key takeaways from the new policy brief for state regulators as they consider how to implement load flexibility:
1. Define a flexible large load class. The brief recommends that state regulators incorporate four qualifying commitments for a flexible large load:
- Be voluntary, not mandatory, to let the market determine the right mix of flexible and inflexible loads.
- Be made in the interconnection process or as a condition of retail service, so that the commitment can inform study assumptions and infrastructure planning.
- Be long-term for the duration of retail service to support long-term planning.
- Guarantee minimum curtailment performance across four parameters:
- Depth: Minimum percentage of contract capacity curtailed
- Speed: Response time to operator signal
- Duration: Minimum hours per curtailment event
- Availability: Minimum hours available per year
2. Develop load interconnection rules that enable flexibility. States can leverage the incentive of speed of connection by letting flexible large loads move ahead of non-flexible ones in the queue. They could also require utilities to factor in a customer's flexibility commitment when modeling how much infrastructure is needed to serve it.
3. Set rates that reflect the lower cost causation and risk profile of flexible large load. Whenever possible, regulators should ensure a large customer is directly charged for the costs of infrastructure built specifically for it rather than spread across all ratepayers. Demand charges and lower minimum charges, exit fees and deposit requirements could all incentivize flexibility. Time-varying energy prices could also give large load customers an ongoing financial reason to reduce their usage when it matters most.
4. Incorporate flexibility into load forecasting and planning. The brief encourages state regulators to require utilities to improve how they forecast large load demand. Potential improvements include collecting better data from customers applying to connect, separating large load forecasts from general forecasts and modeling multiple possible futures rather than a single projection. The brief also recommends requiring that flexibility commitments be built into long-term resource planning to quantify the value of those commitments and account for them in infrastructure decisions.
5. Create “bring-your-own-capacity” requirements. States are increasingly turning to these frameworks to motivate large electricity customers to either develop facilities that require less new generation or to procure new capacity to meet their own needs. States should design these requirements to avoid inadvertently discouraging flexibility by considering flexibility exemptions or allowing flexibility commitments to satisfy the requirements.
The recommendations for state regulators follow a November policy brief from many of the same authors to inform rulemaking by the Federal Energy Regulatory Commission (FERC). That paper outlined how the proposed FERC rules could effectively incorporate load flexibility to more quickly connect data centers and other large energy users to the grid.
The brief is part of a broader range of work by Duke University experts and their partners to help policymakers, utilities, regulators and large energy users navigate accelerating energy demand in the United States. Through rigorous research, they are focusing on practical policy, regulatory and market pathways to align reliability, affordability and sustainability.
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CITATION: Walsh, S., M. Farmer, K. Smaczniak, A. Zevin, N. Label, G. Daly, and T. Profeta. 2026. Leveraging Large Load Flexibility to Facilitate Access to Power While Protecting Customers: Considerations for State Regulators. NI 26-08. Durham, NC: Nicholas Institute for Energy, Environment & Sustainability, Duke University. https://nicholasinstitute.duke.edu/publications/leveraging-large-load-flexibility-facilitate-access-power-while-protecting-customers.
For media inquiries, contact the Nicholas Institute communications team at ni-comm@duke.edu.
