Central Electric Power Cooperative is well acquainted with data centers and the challenges and opportunities they can bring to the power grid. As more of these large-load entities settle in South Carolina, the generation and transmission co-op will apply a new rate to support its long-standing commitment to affordable, reliable service.

“We're protecting the member at the end of the line from decisions that are driven by a significant large load," says Cole Price, Central's executive vice president of member services who works with the Columbia-based G&T's 19 distribution co-ops on contracts, rates and economic development issues.

“Our obligation is to support the South Carolina families and businesses we serve, protect them from risk, to keep costs low and put downward pressure on rates," he says.

With that in mind, Central's board recently approved a rate for data centers and any other large loads of 20 megawatts or more coming on to their system. The rate formally locks in protections for existing co-op members that Central has previously included as terms in service contracts with large loads.

The rate requires the following minimum protections:

• Contracts of at least 15 years with early termination penalties.
• Cash deposits and other financial securities.
• Advance payment of necessary electric infrastructure upgrades.
• Acceptance of interruptible power provisions to avoid energy shortages.
• Monthly energy demand minimums, which ensure sufficient revenues are generated to cover system costs.

“Large energy users bring challenges, but they can also bring significant benefits to the power grid, creating efficiencies and paying for system costs that otherwise would have been borne by other South Carolina co-op members," Central CEO Rob Hochstetler says. “Our job is to maximize those benefits while minimizing risks and costs to our co-ops and the South Carolinians they serve."

Central's first experience with data centers came 20 years ago when Google set up shop along Berkeley Electric Cooperative's power lines. Now, that internet giant is expanding in both the Moncks Corner-based co-op's territory and into the service area of Bamberg-based Edisto Electric Cooperative.

Looking ahead, more data centers are locating in cooperative-served communities with Meta and QTS currently building facilities in areas served by Aiken Electric Cooperative and York Electric Cooperative, respectively.

Central is providing its co-ops the support they need along the way.

“From a generation and transmission perspective, some of our distribution co-ops don't have a lot of staff to deal with these larger, more complicated projects and so they can rely on us to augment their staff," says Price.

The new large load rate will facilitate that work.

Under the rate, data centers agree to curtail or reduce consumption when energy supplies get tight due to extreme weather or some unforeseen incident. The G&T notes this provision will minimize the chance of rolling outages for families and businesses even when the grid is under strain.

“In South Carolina, when we have an extended cold period, our peak demand can go well above and beyond what was forecasted and then if you have a generation resource trip offline, well, that's not a good situation," says Price. “So, while data centers want power available 24/7, we have found ways to get them the power they need without impacting system reliability for everyone else. This combination helps us optimize our system."

Central does not currently own or operate generation but purchases wholesale power from Duke Energy, an investor-owned utility, and Santee Cooper, the state-owned public power utility. Price says the new rate will enhance their collaboration to protect the system.

The rate also helps accelerate energy infrastructure improvements while helping manage costs, as data centers and similar large loads must prepay for the transmission and substation upgrades necessary for their interconnection.

“There's a lot of upgrade work that is required for serving these large loads," says Price. “It helps us do work that would need to be done eventually now so they're going to pay for the acceleration and the upgrade."

For G&Ts with data centers and other large loads in their co-ops' territories, Central offers three key suggestions: Communicate early and often with the board, learn what the local impacts actually entail, and start getting prepared.

Price underscores the importance of having financial guarantees in place—such as letters of credit or cash deposits—from developers to cover certain costs over their length of operations.

“Make sure you understand the risks and the benefits," he says. “Put tools and policies in place to handle the work processes. Protecting your consumers with the right financial safeguards and metrics is important. Our new rate helps with that."

Managed responsibly, data centers and their high load factor can make co-op systems more efficient, benefiting existing members. They take on a large share of the co-op's fixed costs, reducing what everyone else must pay for the co-op's facilities and infrastructure.

Which takes us back to the co-op member at the end of the line.

“A 200-megawatt data center will help absorb some of those fixed costs that would otherwise be paid for by families and small business," says Price. “The new rate is focused on making sure South Carolinians are getting the benefit."