Large Load Rules: Permit, Rate Schedule or Contract?
Large load rules use MW thresholds that measure different things. How a permit order, a rate schedule and a service agreement each set the terms.
A megawatt figure in a large load rule only means something once you know what the rule controls. Three 2026 examples show why. Pennsylvania uses peak demand over 25 MW to decide which permit track a data center gets. TVA uses contract demand over 5,000 kW to decide which rate schedule a customer pays. And a FERC dispute over a Commonwealth Edison service agreement turned on neither threshold. Its sharpest fight was over a $1 letter of credit.
These large load rules sit in three different instruments: a state permitting order, a utility rate schedule and a FERC-jurisdictional service agreement. Each one controls something different, uses its own trigger and takes effect on its own terms. A utility planner, a contractor or an equipment buyer reading a headline number needs to know which instrument it came from before planning around it.
A Permit Order: Pennsylvania’s Peak-Demand Trigger
Governor Shapiro executed Executive Order 2026-05 on August 18, 2026. Section 1(a) directs the Department of Environmental Protection to develop a template Consent Order and Agreement that developers of “any data center with peak demand of over 25 MW” must execute to use the review process in Section 1(b).
That sets up two permit tracks:
- Developers who sign a project-specific Consent Order and Agreement get rolling review and rolling issuance. Permits still issue only after the project documents consistency with local land-use planning and has its local approvals.
- Developers who do not sign face a slower path under Section 1(c). DEP does not begin review until local approvals and any required water withdrawal or wastewater discharge authorization are documented. Nothing issues until every application has been received and reviewed, and the applications are excluded from the PAyback and Permit Decision Guarantee programs.
The order does not ban a non-consenting project. It changes the order and speed of review. Section 1(e) also removes data center projects from the PA Permit Fast Track Program.
What the order does not do matters as much. Section 3 directs the Governor’s Special Counsel to advocate at the Pennsylvania PUC for rules on curtailment and cost recovery. That is a position the administration will argue, not a tariff any utility must apply today. The order takes effect immediately and stays in force until amended or rescinded by the Governor. Our Executive Order 2026-05 explainer covers the dockets it names.
A Rate Schedule: TVA’s Contract-Demand Classes
The TVA board approved its data center rate actions on August 20, 2026. The approved Attachment II creates two schedules:
| Schedule | Status | Applies when |
|---|---|---|
| DCA | Optional distributor offering | Higher of onpeak or offpeak contract demand is greater than 1,000 kW but not more than 5,000 kW |
| DC | Mandatory | Higher of onpeak or offpeak contract demand is greater than 5,000 kW |
Both schedules also require that the major use of electricity at the delivery point be a qualifying activity: 2022 NAICS subsector 518 or 519 (excluding 519210), NAICS 522320 or 541214, or, in TVA’s sole judgment, operation of computational equipment.
The measure here is contract demand, not nameplate capacity and not Pennsylvania’s peak demand. The boundary is strict: 5,000 kW exactly falls in the optional class, not the mandatory one.
Schedule DC customers that contract for new or expanded load are subject to a non-refundable Capacity Commitment Charge. Load counts as “Existing,” and is not subject to that charge, if it received TVA board approval for power supply arrangements before June 1, 2026, or had an effective power contract with TVA or a distributor before October 1, 2026 with proper coordination with TVA. For new load requests, the charge applies only above the first 5 MW of contract demand, and Existing loads may request a one-time, location-specific waiver of 5 MW or less for an expansion.
Dates need care. TVA’s board presentation gives October 1, 2026 as the effective date of the new standard data center rate and describes an expected all-in average billing impact of approximately 10%, phased in over three consecutive fiscal years. The board resolution applies the rate changes to bills based on wholesale meter readings taken on and after October 2, 2026. The 10% is TVA’s expected average, not a figure for any one customer. For what the rate means to the local power companies that deliver the load, see our TVA data center rate post.
A Service Agreement: The ComEd Credit-Support Dispute
The third instrument is a contract, and the third number is $1.
In Docket ER26-3257, Commonwealth Edison filed to cancel a Transmission Security Agreement with PowerHouse Hillwood. ComEd gave two grounds: the underlying retail service application had been cancelled, and, in ComEd’s view, Hillwood was in breach for failing to provide the required credit support. FERC’s September 22, 2026 order records the parties’ positions. As the order summarizes them, ComEd argued that the required credit support guards against shifting costs and risks to other customers, and that a $1.00 letter of credit is no different from having no letter at all. Hillwood said it posted a $1 letter of credit because the agreement specified no amount for pre-Year 1 credit support.
FERC did not decide who was right. Applying the three-part Arkla v. Hall test, the Commission declined to exercise primary jurisdiction over the contract dispute, noting the parties’ pending litigation in federal district court in Illinois, including over the letter of credit requirements. It rejected ComEd’s notice of cancellation without prejudice.
The concurring statements went further. Commissioner David Rosner wrote that the credit support “is supposed to serve as a security deposit” protecting the utility’s other customers if a data center does not come online as planned, and that “A $1 letter of credit protects no one.” Chairman Laura Swett and Commissioner Lindsay See, in a joint concurrence, wrote that it is “more important than ever” that RTOs and their transmission owners may propose pro forma Cost Recovery Agreements.
ComEd filed a request for rehearing on October 22, 2026, and Hillwood answered on October 30. The order is not final, and the contract merits remain undecided. The lesson for anyone writing or reviewing a large-load service agreement does not depend on how it ends: the form, amount and timing of credit support is where cost exposure gets decided, and a blank amount invites exactly this kind of fight.
Six Questions Before You Plan Around a Large Load Number
- Which instrument is it? A permit order, a rate schedule and a service agreement bind different parties and are enforced in different places.
- What demand measure does it use? Peak demand, contract demand and nameplate capacity are not interchangeable.
- Is the threshold strictly greater-than or inclusive? Pennsylvania says “over 25 MW.” TVA says “greater than 5,000 kW.”
- When does grandfathering cut off? TVA’s Existing-load test turns on June 1 and October 1, 2026. Pennsylvania’s tracks apply to applications submitted after the order’s effective date.
- What security is required, in what amount and when? The ComEd dispute shows what happens when that is left unstated.
- Is it a rule or a position? Pennsylvania’s Section 3 is advocacy. A rehearing request means an order may still change.
None of these instruments sets a service voltage, requires on-site generation or binds a utility outside its own jurisdiction. Read each one on its own terms. Our procurement intelligence guide covers how to track these filings as they move.
Related Reading
- Pennsylvania Data Center Executive Order 2026-05 Decoded
- TVA Data Center Rate Lands Oct 1 on 153 Distributors
- Data Center Load Pipeline vs Contracted: How to Discount It
Pennsylvania details are from the executed text of Executive Order 2026-05. TVA details are from the August 20, 2026 board presentation and the approved board resolution and attachments. ER26-3257 details are from FERC’s September 22, 2026 order and concurring statements; docket status is as of a FERC eLibrary search on November 8, 2026.
Large load rules keep arriving one instrument at a time. The Feeder is our free weekly digest of the regulatory and supply signals that change what utility buyers specify.
Frequently Asked Questions
Is the Pennsylvania 25 MW threshold the same as TVA's 5,000 kW threshold?
No. Pennsylvania Executive Order 2026-05 applies its permit tracks to data centers with peak demand of over 25 MW. TVA's Schedule DC is mandatory where the higher of a customer's currently effective onpeak or offpeak contract demand is greater than 5,000 kW and the major use is a qualifying data center or computational activity. One is a permit trigger keyed to peak demand, the other a rate class keyed to contract demand.
Does Pennsylvania's order require data centers to be curtailed first?
No. Section 3 of the order directs the Governor's Special Counsel to advocate at the Pennsylvania PUC for rules on curtailment and cost recovery. It is advocacy for future rules, not a tariff.
Did FERC decide whether a $1 letter of credit satisfied ComEd's Transmission Security Agreement?
No. In its September 22, 2026 order in Docket ER26-3257, FERC declined to exercise primary jurisdiction over the contract dispute, citing the parties' pending federal court case, and rejected ComEd's notice of cancellation without prejudice. ComEd requested rehearing on October 22, 2026.
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