Utility Regulation & Affordability
Average Allowed ROE Over Time
Estimate, not company-reported, for the 1985 point (S&P RRA annual averages begin in 1990). The return commissions actually grant, from roughly 15% in the mid-1980s to roughly 9.7% in 2024. The four-decade slide tracked falling rates; the recent upturn is commissions partially catching up to the higher-rate environment.
Rate Case Activity
Estimate, not company-reported: S&P RRA publishes total decision counts but no free general-rate-case series, so these counts are our approximation. Completed general rate cases per year. Filing activity sits at historically high levels because capex outruns approved rates: spend ahead of your last case and you under-earn until the next one resets them.
Electricity Prices vs Headline Inflation
Both indexed to 100 in 2019. Electricity tracked headline through 2021, jumped past it in 2022, and kept climbing as headline cooled: up 37 percent by 2025 against 26 percent for all items. That widening gap is the political constraint on the buildout.
Residential Electricity Prices by State
2025 average residential prices for a selection of states spanning the national range, with the roster utility serving each. Prices reflect fuel mix, geography, and policy costs, not utility efficiency alone.
Average Monthly Residential Bill by State
Price times usage: Hawaii and Connecticut are expensive per kWh, Alabama and Texas are high-bill because homes use more. The US average was $151 a month in 2025.
The dashed line is the US average of $151 a month. High bills can come from high prices (Hawaii, Connecticut) or high usage (Alabama, Texas).
Large-Load Tariff Scorecard
How states are making data centers pay their own way: minimum-take provisions, long contract terms, collateral, and exit fees, all aimed at shifting stranded-asset risk off other ratepayers.
Ohio
AEP Ohio
Approved 2025
Dedicated data-center tariff class with minimum demand charges (a large share of contracted capacity billed whether used or not), multi-year terms, collateral requirements, and exit fees
Texas
ERCOT-wide (statute, PUCT rule, governor directive)
SB 6 enacted June 2025; Batch Zero approved 18 Jun 2026; verification hold from 3 Aug 2026
SB 6 created a large-load interconnection framework with curtailment obligations, disclosure of duplicate requests, and cost responsibility for transmission upgrades. On 18 June 2026 the PUCT approved ERCOT's Batch Zero process, which studies qualified loads of 75 MW or more as one batch. On 3 August 2026 Governor Abbott's letter directed ERCOT to verify data-center projects before advancing any through interconnection; ERCOT postponed its 7 August Batch Zero classification notices and said it would seek a good-cause exception at the PUCT's 20 August meeting
Georgia
Georgia Power (SO)
Rules adopted 2025
Large-load rules with minimum billing terms and creditworthiness standards for loads above 100 MW, plus IRP treatment of new large loads
Virginia
Dominion (D)
SCC final order 31 Jul 2026 (Rider T1)
The SCC directed Dominion to file, in a new docket (PUR-2026-00131, opened 25 Aug 2026), an amended line extension policy requiring a mandatory contribution in aid of construction for defined direct-connect transmission facilities serving large loads, due within 90 days of the order. The order also approved a cost-allocation forecast adjustment and the 85 percent transmission minimum demand charge for certain large-load customers from 1 January 2027
Indiana
NiSource, AES Indiana
Approved 2024 to 2025
Settlements requiring 80 percent minimum take, roughly 10 to 20 year terms, and collateral from large-load customers
PJM (federal)
Multi-state
FERC order December 2025
Co-location proceeding addressing how behind-the-meter and co-located large loads pay for grid services they use
Pennsylvania
State permitting (Executive Order 2026-05)
Executive order 18 Aug 2026
Data centers with peak demand over 25 MW must sign a DEP consent order implementing the Governor's GRID Requirements to enter the state permit review process: clean firm energy procurement scaling from 10 percent to 32 percent by 2035, and the developer pays 100 percent of the costs its project causes
Federal (House)
State utility commissions
H.R. 9340 passed the House 417 to 3 on 16 Sep 2026
Ratepayer Protection Act: state utility commissions would consider large-load standards for data centers drawing more than 100 MW, so that they pay the full incremental cost of serving their loads, using PURPA section 111(d)
Federal (NERC)
Computational load owners, transmission planners and owners
Final ballot concluded 14 Oct 2026; to go to the NERC Board of Trustees for adoption
Project 2026-02 standards CLO-001-1, CLO-002-1 and CLO-003-1 plus revised FAC-001-5 and FAC-002-5: interconnection studies and modeling data, operational data and communications, and protection coordination and disturbance monitoring, for computational load sites of 50 MW or more supplied at 100 kV or above
| Jurisdiction | Key terms |
|---|---|
Ohio AEP Ohio | Dedicated data-center tariff class with minimum demand charges (a large share of contracted capacity billed whether used or not), multi-year terms, collateral requirements, and exit fees |
Texas ERCOT-wide (statute, PUCT rule, governor directive) | SB 6 created a large-load interconnection framework with curtailment obligations, disclosure of duplicate requests, and cost responsibility for transmission upgrades. On 18 June 2026 the PUCT approved ERCOT's Batch Zero process, which studies qualified loads of 75 MW or more as one batch. On 3 August 2026 Governor Abbott's letter directed ERCOT to verify data-center projects before advancing any through interconnection; ERCOT postponed its 7 August Batch Zero classification notices and said it would seek a good-cause exception at the PUCT's 20 August meeting |
Georgia Georgia Power (SO) | Large-load rules with minimum billing terms and creditworthiness standards for loads above 100 MW, plus IRP treatment of new large loads |
Virginia Dominion (D) | The SCC directed Dominion to file, in a new docket (PUR-2026-00131, opened 25 Aug 2026), an amended line extension policy requiring a mandatory contribution in aid of construction for defined direct-connect transmission facilities serving large loads, due within 90 days of the order. The order also approved a cost-allocation forecast adjustment and the 85 percent transmission minimum demand charge for certain large-load customers from 1 January 2027 |
Indiana NiSource, AES Indiana | Settlements requiring 80 percent minimum take, roughly 10 to 20 year terms, and collateral from large-load customers |
PJM (federal) Multi-state | Co-location proceeding addressing how behind-the-meter and co-located large loads pay for grid services they use |
Pennsylvania State permitting (Executive Order 2026-05) | Data centers with peak demand over 25 MW must sign a DEP consent order implementing the Governor's GRID Requirements to enter the state permit review process: clean firm energy procurement scaling from 10 percent to 32 percent by 2035, and the developer pays 100 percent of the costs its project causes |
Federal (House) State utility commissions | Ratepayer Protection Act: state utility commissions would consider large-load standards for data centers drawing more than 100 MW, so that they pay the full incremental cost of serving their loads, using PURPA section 111(d) |
Federal (NERC) Computational load owners, transmission planners and owners | Project 2026-02 standards CLO-001-1, CLO-002-1 and CLO-003-1 plus revised FAC-001-5 and FAC-002-5: interconnection studies and modeling data, operational data and communications, and protection coordination and disturbance monitoring, for computational load sites of 50 MW or more supplied at 100 kV or above |
Wildfire Liability Exposure and Shields
The tail risk the ratemaking formula never priced. California's inverse condemnation doctrine imposes liability without negligence, which drove PG&E's bankruptcy and produced the 21 billion dollar AB 1054 fund now being drawn against.
- Liability regime
- Inverse condemnation: strict liability for damage from utility equipment regardless of negligence
- Shield
- AB 1054 fund of about 21 billion dollars, plus a safety certification that caps shareholder exposure and shifts the burden of proof
- Status
- Edison drawing against the fund for January 2025 Eaton fire losses; PG&E emerged from wildfire bankruptcy in 2020
- Liability regime
- Negligence-based, but the 2023 Lahaina fire produced an existential settlement
- Shield
- None comparable at the time; the state has since considered fund legislation
- Status
- Roughly 2 billion dollars of settlement obligations funded through securitization and equity issuance
- Liability regime
- Negligence-based with active litigation from the 2021 Marshall fire
- Shield
- No dedicated state fund
- Status
- Marshall fire claims proceeding; Xcel also faces Texas Panhandle (Smokehouse Creek) claims
- Liability regime
- Negligence-based; the 2024 Smokehouse Creek fire was the largest in state history
- Shield
- Securitization statutes for extraordinary costs
- Status
- An emerging front rather than a settled regime
- Liability regime
- Negligence-based, with large jury verdicts from the 2020 Labor Day fires
- Shield
- No dedicated fund
- Status
- Included as the clearest evidence that the risk extends beyond California
- Liability regime
- Standard negligence liability with prudence review
- Shield
- Storm and catastrophe cost recovery through riders and securitization
- Status
- Wildfire is not a material tail risk in most territories