Filings describe tariff treatment of behind-the-meter generation serving large load

Faced with multi-year interconnection timelines, large load developers increasingly propose on-site generation. The proposition is attractive: capacity in months rather than years, and no dependence on a study cycle.

The complication is that almost no such load is genuinely islanded. It requires grid service for outages, for maintenance on the on-site units, and for the periods when on-site generation is unavailable. That residual service is what tariffs struggle to price, because it is low in energy and high in capacity value.

Air permitting is the second constraint, and in the regions with the densest load growth it is often the binding one.

For an energy lawyer, the recurring issue is whether standby and backup service rates reflect the cost of holding capacity for a load that uses it rarely and heavily.

For an investor, on-site generation converts an interconnection delay into an operating business with fuel exposure, which is a different risk, not a smaller one.

What to watch: standby rate filings in jurisdictions with concentrated large load growth.