Comparing the Two Models: Risk, Speed, and Cost Allocation
Paradigm
ExampleS
Typical Costs and Downsides
Typical (Rate) Payer
Benefits and Opportunities (to Whom)
BYOG (Bring Your Own Generation)/ Co-Location
Backstop/ Supplemental Capacity Procurement
– SPP: High Impact Large Load (HILL) and High Impact Large Load Generation Assessment (HILLGA)
– Fermi: Project Matador
– Constellation: Three Mile Island
Likely Risks (to Whom)
– new plant/ recommissioning costs
– grid services
– sometimes standby/backup capability
Data centers
– load shedding (all grid customers)
– stranded generation (generators)
– quick deployment (data centers)
– choice of power type (data centers)
– minimizes transmission costs (all grid customers)
– revenue certainty (generators)
– backup capacity sales (to storage/DERs)
– futureproofing (to generators/developers)
– future transmission build (utilities and transmission owners
– PJM: “backstop” auction concept
– Independent Electricity System Operator (IESO) Ontario: accelerated direct procurement
– new plant costs
– substantial transmission upgrades
– longer planning and engineering timelines
TBD
– overbuild (non–data center customers)
– cost-shift risk (non–data center customers)
– underbuild (all grid customers)
– market distortion risk (existing generators)
– market design reforms (ISOs/RTOs)
– increased rate base (utilities/transmission owners)
– non-transmission build congestion relief (storage/DERs)