ALLENTOWN, Pa. – PPL Electric Utilities is eyeing a change that could make transmission costs easier to see on customer bills and give itself a way to directly charge some large energy users, like data centers, for some of the infrastructure they'll need.
As the utility prepares for a dramatic increase in demand from large-load customers such as data centers, the company filed a petition with the Pennsylvania Public Utility Commission on Sept. 14.
It's seeking approval for a new Customer Protection Transmission Rider, or CPTR. The proposal would eliminate PPL’s existing Transmission Service Charge and replace it with the new rider.
The change would affect every PPL customer. But the amount each customer pays would depend on their rate class and, for some of the utility’s largest customers, whether PPL determines certain transmission costs were caused by their connection to the grid.
What is PPL actually proposing?
Transmission costs are the costs of moving electricity over the grid from where it is generated to local distribution systems.
PPL currently recovers those costs through its Transmission Service Charge and generation supply charges paid by customers who buy electricity through competitive suppliers.
Under the proposal, PPL would recoup covered transmission costs through a separate charge on customers’ bills. The utility says that would make the costs more transparent and eliminate the need for competitive electricity suppliers to separately account for certain transmission costs.
"As Pennsylvania grows, our responsibility is to make sure existing customers are protected," Christine Martin, president of PPL Electric Utilities, said in a news release.
"This proposal would make transmission costs easier to see on customer bills and provide a way to assign certain transmission costs associated with serving large energy users directly to those customers," Martin said.
Where do data centers come in?
The proposal is closely tied to PPL’s growing number of requests from very large electricity users.
PPL's project pipeline includes about 31.8 gigawatts of advanced-stage data centers through 2034. That demand alone is more than four times PPL's current peak demand of about 7.8 GW.
Accommodating that growth will require significant transmission investment, according to the utility.
PPL already has a special rate, LP-6, for certain large-load customers. Under the new proposal, those customers would continue to pay their share of the broader transmission system. But they also could be responsible for certain additional transmission costs that PPL determines would not have been incurred without their interconnection.
In other words, PPL is not proposing that large customers pay for all of their electricity infrastructure. It would allow the utility to identify certain network investments it says would not have been made but for large-load interconnections and assign those costs directly to LP-6 customers.
The Pennsylvania Office of Consumer Advocate, which represents utility consumers before the PUC, said it is reviewing the filing but is not ready to comment on the proposal at this time.
Will my electric bill go up?
There is not yet a simple answer to this question.
PPL says the proposal would not increase its total transmission and distribution revenues. Instead, it would change how those costs are recovered and allocated and how they appear on customers’ bills.
The filing also does not provide a straightforward estimate of how the proposal would change the average residential customer’s monthly bill. That is an important piece of information that will need to emerge during the PUC review.
PPL says it is still developing estimates of the costs of implementing the new system, including changes to billing, electronic data interchange, tariff administration and customer communications. The utility proposes charging those implementation expenses to LP-6 customers.
Could there be savings for customers who shop for electricity?
PPL says there could be.
The utility argues that competitive electricity suppliers currently have to account for uncertainty surrounding future transmission costs when setting prices. Moving covered transmission costs into a utility-administered CPTR, PPL says, could reduce that uncertainty and potentially reduce premiums suppliers include in their prices.
That is PPL’s expectation, however, rather than a guaranteed reduction in customers’ generation costs.
Why is PPL doing this now?
The proposal comes as regulators and utilities across Pennsylvania grapple with the impact of data centers and other energy-intensive developments on the electric grid.
PPL says its large-load pipeline is far greater than its current peak demand and that serving those customers will require substantial transmission investment.
Some costs are already handled directly. Large customers can be required to make Contributions in Aid of Construction, or CIAC payments, for certain upgrades directly attributable to their projects.
Other transmission investments become part of the broader transmission system and are recovered through transmission rates. PPL’s proposal is aimed at creating another layer of cost allocation for investments the utility says are specifically driven by large-load interconnections.
What happens next?
The PUC will review PPL’s petition before deciding whether to approve, reject or modify the proposal.
PPL says the commission has nine months to act on the filing, putting the deadline at June 14, 2027. The utility is asking for a decision by June 10 and is targeting implementation in the first quarter of 2028.