The honest answer is: it depends on the facility, the upgrade, the tariff, and the regulator. “The data center pays” may be true for one dedicated line while broader generation or regional network costs still flow through utility rates.
Separate three kinds of cost
Direct-connect facilities are lines, substations, or equipment built primarily to connect a customer. Network upgrades strengthen a shared transmission or distribution system. Generation and capacity costs pay for enough energy and reliable supply over time. Each can have a different assignment and recovery method.
Upfront payment is not the whole answer
A large customer may advance construction money, make a contribution in aid of construction, sign a minimum-demand contract, or pay a dedicated rate. Reviewers should ask whether any amount is refundable, credited later, depreciated through rates, or reassigned if the project is delayed, downsized, or canceled.
Why cost-recovery agreements matter
FERC’s June 2026 regional show-cause actions highlight cost-recovery agreements intended to keep infrastructure costs with the large load that caused them—even if the load does not arrive as forecast. The details remain tariff- and region-specific, so a general federal announcement is not a substitute for the approved utility terms serving a particular project.
Virginia’s direct-connect example
In Case PUR-2026-00056, the Virginia State Corporation Commission approved an updated Rider T1 allocation and directed Dominion to propose a prospective contribution policy for defined direct-connect transmission facilities serving new or expanding large loads. That does not resolve every regional transmission or generation-cost question; it creates a specific pathway for a specific category of facilities.
Questions for the public record
- Which facilities are dedicated, local network, regional network, generation, or capacity costs?
- Which tariff, rider, agreement, or commission order controls each category?
- What deposit, security, minimum bill, contract term, and exit fee apply?
- Who pays if the requested load arrives late or never materializes?
- Can any payment be refunded or credited through future rates?
- What portion, if any, can enter the bills of other customers?
A verifiable answer names the facilities, dollar responsibility, governing tariff, contract duration, security, cancellation treatment, and regulator.
PRIMARY SOURCES
Verify the public record
These official or institutional sources support the guide. Check the original text and its effective date before relying on a summary.