What does waiting for the grid cost, and who pays?

A large load waits for its grid connection: what the wait costs the developer, other electricity customers and society

Case file CF7 of Energy Systems, Step by Step: a large load waits for its grid connection; what the wait costs the developer, other electricity customers and society, and how a tariff moves cost between them.
  • Analyst · L2
  • Case file
  • 10 min
  • After lesson 8

1 · The puzzle

A large new load, such as a data center or a factory, is ready to run, but its grid service will not start for months. What does the wait cost, and who pays?

Words first: energization is switching on grid service; the developer is the company building the facility; ratepayers are the utility's other customers.

2 · The question in one sentence

What does it cost when a large data center must wait for grid energization, and how does the delay affect the developer, electricity ratepayers and society?

Question type: descriptive (how much, and for whom?).

3 · Scale and boundary

  • Inside: one large load waiting for its first grid service (the study's case: a 300 MW-IT data center), priced for three parties in present value.
  • Left out: why the connection is late, whether the network can carry the load, and real project data: the parameters are illustrative.

4 · Decisions, goal and rules, in words

  • Decisions: whether to pay for a mitigation option (staged service or bridge power), and who funds it.
  • Goal: price the wait for each party, so an option can be judged against what it saves each one.
  • Rules: the three accounts stay separate; a net-benefit test says when they may be combined.

5 · Data and method

  • A present-value framework turns the delayed computing capacity into the grid MW it needs and prices the delay in three ledgers.
  • Two measures compare cases: a delay cost per MW-month, and the largest payment worth making to shorten the wait.
  • Inputs are screened with Latin hypercube sampling.

6 · What came out, and where it holds

A late grid connection costs the developer lost margin and carrying costs; ratepayers face utility carrying and stranding costs; society bears external costs.

The study keeps these present-value accounts separate.

For a 300 MW-IT facility, a 36-month delay costs the developer on the order of $0.7 billion in present value.

Staged energization can recover a large share of that cost.

Ratepayer exposure depends strongly on large-load tariff design.

Approved excerpt of: Li et al. (2026), accepted paper, 2026 North American Power Symposium (NAPS); DOI pending.

The delay is treated as exogenous and parameters are illustrative; network feasibility is not modeled, and the social perspective is illustrated with a single bridge-power example.

Approved excerpt of: Li et al. (2026), accepted paper, 2026 North American Power Symposium (NAPS); DOI pending.

Holds when: the delay is given and the inputs are illustrative. Leaves out: why service is late.

The question in time

  1. 20 December 2024 · Data-center demand measured. DOE releases a Berkeley Lab report: U.S. data centers used about 176 TWh in 2023, about 4.4% of U.S. electricity. Source: U.S. Department of Energy, 20 December 2024, as of 3 November 2026
  2. 23 October 2025 · Federal rulemaking requested. The Secretary of Energy asks FERC to start a rulemaking on connecting large loads to the interstate transmission system. Source: Letter of the Secretary of Energy to FERC, 23 October 2025 (PDF), as of 3 November 2026
  3. October 2026 · Paper presented. The delay is priced in three separate accounts: the developer, electricity ratepayers and society. Source: Li et al. (2026), North American Power Symposium (NAPS 2026), accepted; DOI pending
  4. 30 October 2026 · Code released. Source: code-delayed-energization on GitHub, as of 3 November 2026

Every result about the study is quoted from the approved excerpt of the accepted paper named in the sources; the two public events carry their own sources. The toy below uses illustrative round numbers.

The idea behind it, then where the result holds

One large load waits for the grid (illustrative)

The toy's assumptions (illustrative)
The load 100 MW, such as a data center or a factory
Margin once connected $45,000 per MW a month (revenue minus operating costs)
Capital ready and idle $500M of buildings and equipment, carried at the discount rate
Grid upgrades built for it $60M; while it waits, the utility's money in them still costs interest
Chance it never arrives 0.5% more each month of waiting, at most 50%; then the upgrades are stranded
Large-load tariff decides what share of those utility costs the waiting load pays; other customers pay the rest
Bridge power on-site generators run half the load during the wait, at $30 per MWh above grid power
Its CO₂ 0.1 t per MWh more than grid power, had the load been connected on time; $100 per tonne
Discounting 8% a year, month by month

Worked month: the lost margin is $45,000 × 100 MW = $4.5M a month. Over 24 months, discounted month by month, that is $4.5M × 22.17 = $99.8M today.

Present values of a 100 MW load's wait, other customers paying the utility's costs, no bridge power.
Wait Developer Other customers Society Developer per MW-month
6 months $45.3M $4.0M $0.0M $75.5k
18 months $130.8M $11.4M $0.0M $72.6k
30 months $209.9M $17.9M $0.0M $70.0k
42 months $283.2M $23.8M $0.0M $67.4k
  • At 24 months, a tariff that makes the waiting load pay all of the utility's costs moves $14.7M from other customers to the developer; the total stays $185.8M.
  • Bridge power for half the load saves the developer $25.6M and adds $8.1M of CO₂ damage above grid power, for society.

Three accounts, three questions

Account What the wait costs them The question it answers In the toy, 24 months, no tariff
Developer (private) margin not earned; interest on buildings and equipment that sit idle Is shortening the wait worth paying for? $171.1M
Other customers (ratepayers) the utility's carrying cost of upgrades built for the load, and the risk they are stranded Does the tariff protect people who did not ask for the load? $14.7M
Society external costs, such as bridge power's CO₂ above what grid power would have emitted Does an option add harm that nobody pays for? $0.0M

One total would hide who pays.

In this toy, a tariff only moves a fixed cost between accounts; it does not change the wait or what anyone does. Only a shorter wait shrinks the cost.

Where the result holds

It holds when
  • the delay is taken as given, not explained;
  • the parameters are illustrative, so the study reports which inputs move the result, not a forecast;
  • the three accounts stay separate, and a net-benefit test says when they may be added.
It leaves out
  • why service is late: the interconnection process itself;
  • whether the network can carry the load (network feasibility);
  • social costs beyond a single bridge-power example.

From the approved excerpt of Li et al. (2026), NAPS 2026 (accepted).

Go deeper · ModelerPresent value month by month, and the most worth paying to wait less
  • A cost \(c\) in each month of a \(\tau\)-month wait is worth \(c \cdot \frac{1 - (1+i)^{-\tau}}{i}\) today, with \(i = (1+r)^{1/12} - 1\) the monthly rate for a yearly discount rate \(r\) (lesson 7 discounts by the year).
  • The most a developer should pay to shorten the wait is the cost it avoids: its cost at the original wait minus its cost at the shorter one, before other risks or costs.
  • In the toy, 24 → 18 months avoids $40.3M ($171.1M − $130.8M).
  • An option creates an overall net benefit when the savings in all accounts exceed its cost plus any harm it adds, each counted once.
  • Making every party better off may also take compensation; who pays is a separate choice.
  • Sampling uncertain inputs comes in Scenarios, Monte Carlo and global sensitivity (M7); what a large load is, in F8; why connections take years, in A6.

Check yourself, then try it

Myth or fact? “A tariff that makes the waiting load pay the utility's costs makes the delay cheaper.”

  • Myth
  • Fact
Answer

Myth. In the toy at 24 months it moves $14.7M from other customers to the developer; the total stays $185.8M.

In this toy, the tariff only reallocates a fixed cost; it does not change the wait or what anyone does.

Myth or fact? “An option can save the developer money while adding a cost that someone else bears.”

  • Myth
  • Fact
Answer

Fact. In the toy at 24 months, bridge power for half the load saves the developer $25.6M and adds $8.1M of CO₂ damage above grid power. Separate accounts show both.

Try it yourself

Optional, about 30 minutes; needs Python on your computer (lesson B2).

  • Run examples/minimal.py. Write the illustrative files with code-delay example my_scenario.json --grid grid.json --ranges ranges.json.
  • Double delay_months in my_scenario.json and run code-delay run my_scenario.json --out-dir outputs/run. Does the developer's cost per MW-month stay level?
  • Run examples/options.py: compare staged service with full service, and read the net-benefit test for the bridge pathway.

code-delayed-energization: public example repository · MIT licence · illustrative inputs.

Numbers, sources and what’s next

Numbers to remember

Number What it means Source
on the order of $0.7 billion For a 300 MW-IT facility, a 36-month delay costs the developer on the order of $0.7 billion in present value. Li et al. (2026), NAPS 2026 (accepted) · presented October 2026; DOI pending
about 4.4% Share of U.S. electricity used by data centers in 2023 (about 176 TWh). U.S. Department of Energy (Berkeley Lab report) · published 20 December 2024; data for 2023

Keep going

Back to the course map

Where this came up before

Lesson 7 separated building, upkeep and fuel costs and discounted future money. This case separates one delay's cost by who bears it.

Sources and further reading

Spotted an error, or stuck? Write to hlli@ksu.edu. Corrections are made in place and dated here.

Text licensed CC BY 4.0, code MIT: teachers and students may reuse and adapt it, with credit to Honglin Li.