Exelon’s Statement on the FERC Nov. 1 Order
We appreciate the Federal Energy Regulatory Commission creating an opportunity to consider co-located load in a holistic way, and for their focus on reliability and affordability. As we have shared, Exelon is excited about the economic possibilities data centers can bring to the communities we serve, and we also believe the US needs to be a leader in artificial intelligence. However, the energy demands must be met in a way that is fair to all customers. We look forward to continuing to partner on an equitable solution.
What is co-location?
Co-location is a practice in which data centers and other large customers are built next to an existing power plant and shares its interconnection with the grid.
Does Exelon support co-location?
Yes. Exelon believes that co-location can help support the nationwide energy transformation and economic development. However, it’s important to have the right policies and rate designs in place.
Exelon works with data centers and other large customers to meet their service needs, no matter where they are located. But as long as they are connected to the grid – even if their first point of connection is a generator – co-located data centers are network load; they use network services, and they need to contribute the cost of network infrastructure providing those services. Every user of the grid pays their share, no matter where and how they connect to it.
When implemented correctly, co-location can provide a range of advantages that support both the energy sector and the communities in which they are built:
- Enhances efficiency by maximizing the use of existing infrastructure and land.
- Stimulates economic growth by generating employment and investment in the local neighborhood.
A rational approach to co-location – one that encourages economic development while prioritizing customer protection and grid reliability – is essential as we seek to have consistent and fair co-location practices adopted across the nation.
How can co-location be done in a way that’s best for customers?
Co-location can offer real benefits, but our concern is that without appropriate regulation, data centers may evade paying their fair share of costs of the grid and the grid services that they use. This can lead to the reallocation of these costs to existing customers, imposing an unjust financial burden on them – now and into perpetuity. Additionally, data centers need to be appropriately regulated to ensure they can interconnect safely, to avoid the risk of grid disruption and unreliable connection for other customers.
Exelon believes the solution to balancing co-location benefits with customer protection can be simplified in two principles:
Co-location interconnection and generators must undergo careful studies and regulation to ensure they are able to interconnect safely without causing wider grid disruptions.
The co-located load must be treated as a retail customer and pay equitable rates for the use of grid support.
Ultimately, data centers must pay their fair share to cover grid costs to ensure that the benefits of co-location are not accompanied by an undue burden on existing customers.
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