Delaware · Through 2026-08-27 (85 Del. Laws, c. 453, 455-458, 460)

26 Del. C. § 203G: Approval of electric service agreements for large energy use facilities.

(a) No person or entity may begin operations as a large energy use facility served by a Commission-regulated electric utility without first obtaining from the Commission the approval of an electric service agreement (“ESA”) and entering into a transmission security agreement ( “TSA” ) with the Commission-regulated electric utility.
(b) As a condition of receiving retail electric service by a Commission-regulated electric utility in this State, a large energy use facility must negotiate the terms of an ESA with a Commission-regulated electric utility and thereafter the Commission-regulated electric utility must submit the ESA for review and approval by the Commission. As a further condition of receiving electric service in this State, there must be a transmission rate on file with the Federal Energy Regulatory Commission that, as to transmission costs, meets the objectives of subsection (c) of this section. Notwithstanding any other provision of this title, Commission approval is required prior to any interconnection under a large energy user tariff promulgated by a Commission-regulated electric utility under the provisions of § 317 of this title.
(c) It is the intent of the General Assembly that residential retail electric customers and all other industrial and commercial customers, other than large energy use facilities, should not bear the financial costs or risks associated with large energy use facilities interconnecting to the electric system serving this State and that a regulatory framework be established to ensure large energy use facilities enter into agreements to directly assign these costs. Towards that end, the Commission shall promulgate regulations to govern tariffs subject to the review and approval of the Commission that are applicable to large energy use facilities under the Commission’s jurisdiction, and to set forth the minimum protective features required to be included in an ESA and that must be included in the applicable transmission rate if a large energy use facility is entitled to take retail service in this State. The Commission regulations will identify specific form language to be incorporated into all ESAs, and such language shall ensure the protections set forth in § 317 of this title. At minimum, the ESA shall govern the terms and conditions under which the Commission-regulated electric utility will provide distribution service, interconnection, cost allocation, and risk mitigation associated with serving the large energy use facility. The ESA may not require the procurement of electric supply service from the Commission-regulated electric utility and nothing in the ESA may restrict a large energy use facility from procuring electric supply service from a certified electric supplier. The ESA must include all of the following provisions:
(1) Specify the duration of the contract, which must be a minimum of 10 years commencing after load ramp and a minimum of 15 years total including the load ramp period.
(2) Specify the date or estimated date that the Commission-regulated electric utility will begin to provide electricity service.
(3) Obligate the large energy use facility to pay a minimum amount or percentage of distribution charges, which cannot be less than 90% of contract capacity, based on the large energy use facility’s projected electricity usage for the electricity services the Commission-regulated electric utility is contracted to provide for the duration of the contract.
(4) For large energy use facilities that procure electricity from the Commission-regulated electric utility, obligate the large energy use facility to pay a minimum amount or percentage of supply costs, which cannot be less than 90% of contract capacity, based on the large energy use facility’s projected electricity usage for the electricity services the Commission-regulated electric utility is contracted to provide for the duration of the contract. This paragraph (c)(4) does not apply to a large energy use facility that procures electric supply service from a certified electric supplier.
(5) Specify that, for purposes of calculating its retail service charges and for allocating among the retail customers of the utility those transmission charges paid by the utility in accordance with federal law and tariffs on file with the Federal Energy Regulatory Commission, the large energy use facility’s annual capacity peak load contribution will be deemed to have been at least 90% of the contract capacity as adjusted by the applicable line loss factor and the large energy use facility’s annual network peak load contribution will be deemed to have been at least 90% of the contract capacity as adjusted by the applicable line loss factor.
(6) Specify the duration of the load ramp period during which a large energy use facility must reach full forecasted load and specify interim load levels the facility must meet at designated points during this period.
(7) Outline exit procedures that will apply to large energy use facility customers in the event of contract termination. Such procedures must include at least a 5-year advance notice of termination.
(8) Set exit fees that ensure the large energy use facility makes adequate contributions to offset all unrecovered costs in the event of contract termination.
(9) Require physical and operational readiness measures that facilitate targeted curtailment, including dedicated or otherwise segregable feeders where practicable; separation of any “critical” load segments behind the meter; and telemetry and communications capability sufficient for the Commission-regulated electric utility to execute and confirm curtailment actions during emergency operations.
(10) Establish enforceable curtailment and interruptibility obligations during emergencies and other circumstances determined by the Commission, Commission-regulated electric utility, or directed by the federal regional transmission system operator.
(11) Require bonding or letters of credit backed by an investment-grade entity, or other cash-equivalent financial guarantees to ensure protection of other customers in the event of bankruptcy, liquidation, or other circumstances that would prevent the large energy use facility from meeting its obligations under the ESA.
(12) Meet any other conditions the Commission may require in the public interest, including the extent to which the large energy use facility uses local labor that is paid a prevailing wage.
(d) In determining whether to approve an ESA, the Commission shall consider all of the following:
(1) Whether the ESA is consistent with regulations promulgated by the Commission governing ESAs.
(2) Whether the ESA, in combination with the underlying tariff, ensures that all applicable costs attributable to the large energy use facility are directly assigned to the large energy use facility. In making this determination, the Commission shall consider the results of any applicable incremental cost test, as provided for in § 317 of this title.
(3) Whether the ESA, in combination with the underlying tariff, provides protections necessary to ensure that other customers of the Commission-regulated electric utility are not placed at risk for paying stranded costs associated with the Commission-regulated electric utility serving the large energy use facility.
(4) The need for and impact of the project proposed by the large energy use facility on the safe, adequate, and reliable operation or delivery of electric supply services. The following shall be considered positive factors, but not requirements, in evaluating an ESA, if a large energy use facility constructs or causes the construction of new generation, where such new generation: (i)
a. Is located within Delaware or within the PJM Interconnection, L.L.C. (“PJM”) Delmarva Power and Light (“DPL”) transmission zone or within a transmission zone contiguous by land to the DPL transmission zone, with sufficient existing transmission infrastructure to deliver this additional electricity to Delaware;
b. Includes newly constructed generation at an existing facility, uprates, or repowering of deactivated or retired generating units as of June 12, 2026; provided that capacity that previously participated in the PJM base residual auction qualifies only to the extent attributable to such uprate or repowering;
c. Matches the megawatt demand of the large energy use facility;
d. Repurposes existing transmission interconnection infrastructure, land, or other generation-related assets associated with a prior in-state facility;
e. Is determined by this State Energy Office to be consistent with the achievement of this State’s greenhouse gas emissions reductions targets, as specified in § 10003 of Title 7; or
f. Is determined by the State Energy Office to be consistent with this State’s renewable portfolio standards, as specified in § 354 of this title.
It shall further be considered a positive factor in evaluating an ESA if a large energy use facility agrees to demand flexibility terms to assist with energy affordability, including demand flexibility during periods of dramatically increased wholesale electricity costs.
(5) The extent to which the large energy use facility will use a local labor force for construction and ongoing operation, and the extent to which the project will pay such labor force a prevailing wage.
(6) The impact of the large energy use facility on the area in which it is to be located, including the possibility that the large energy use facility provides a community benefits agreement to ameliorate any negative impacts.
(7) The impact of approving the ESA on this State’s economy, the impacts to this State’s ratepayers, and whether the application is consistent with the achievement of this State’s greenhouse gas emissions reductions targets, as specified in § 10003 of Title 7, and whether the application is consistent with this State’s renewable portfolio standards, as specified in § 354 this title.
(8) The impact of approving an ESA on the health, safety, and welfare of the general public.
(9) The demonstrated experience, operating expertise, and long-term viability of the large energy use facility or its affiliates, partners, or parent company.
(e) The Commission must act on an application to approve an ESA within 90 days of the submission of a completed application. For good cause shown, and if it finds that the public interest would be served, the Commission may extend the date of its action on an application for an additional period not to exceed 90 days. The application for approval of an ESA must be in writing, in such form as determined by the Commission, and contain such data, studies, documentation, or other information as the Commission shall prescribe. The application must include all of the following:
(1) The impact of the plan on transmission capacity.
(2) Upgrades, if any, to transmission or distribution infrastructure associated with the plan.
(3) The amount of electricity utilized by generation type and whether it is sourced from new or existing generation.
(4) How electricity use will be curtailed during high demand periods.
(5) The quantity and type of on-site back-up power, if any.
(6) The anticipated lifespan of the facility.
(7) Whether the business will trigger supplemental transmission projects.
(8) A study of the impact of the plan on electricity costs in Delaware.
(9) A study of the impact of the plan on grid reliability in Delaware.
(f) The Commission may revise and adjust its regulations in response to federal or PJM laws, rules, regulations, or tariffs regarding the introduction of large energy use facilities throughout the PJM region. The Commission may work to ensure that changes in capacity market operation, transmission cost allocation, or other processes at the PJM level will not, to the maximum extent possible, result in higher costs for Delaware ratepayers not included in the large energy use facility classification. Any adjustments to the tariff specified in § 317 of this title, or in the regulations governing ESAs, must aim to assure that any new obligations fall upon the class of energy users causing such obligations.
(g) A facility in operation as of August 26, 2026, may not be considered a large energy use facility. However, a change to an existing facility that increases the usage above the thresholds defined for a large energy use facility will trigger the provisions of this chapter requiring the approval of an ESA.
(h) An ESA may not be transferred from the applicant to another person or entity without the written approval of the Commission.
(i) Commission-regulated electric utilities shall be required to provide to the Commission annually detailed, project-specific information for each anticipated large energy use facility, including development status, evidence of financial commitment, ramp schedules, and any duplicative interconnection requests. The Commission shall submit a report listing the ESA applications received and their disposition for the prior year to the Governor, the Director and Librarian of the Division of Legislative Services, and the Secretary of the Senate and the Chief Clerk of the House for distribution to members of the General Assembly not later than December 31st of each year.
(j) ESAs and TSAs must be interpreted and administered in a manner consistent with Chapter 10 of this title, including the State policy of retail competition and direct access. Nothing in this section, § 317 of this title, or any regulation promulgated hereunder shall be construed to do any of the following:
(1) Limit or impair the right of any retail electric customer, including a large energy use facility, to purchase electric supply service from a certified electric supplier.
(2) Require a large energy use facility to procure electric supply service from a Commission-regulated electric utility.
(3) Condition interconnection, distribution service, or transmission service upon the customer’s agreement to take electric supply service from a Commission-regulated electric utility.

Where this section sits in the code

Title 26. Public Utilities
Chapter 1. Public Service Commission
Subchapter II. Jurisdiction and Powers

(b) As a condition of receiving retail electric service by a Commission-regulated electric utility in this State, a large energy use facility must negotiate the terms of an ESA with a Commission-regulated electric utility and thereafter the Commission-regulated electric utility must submit the ESA for review and approval by the Commission. As a further condition of receiving electric service in this State, there must be a transmission rate on file with the Federal Energy Regulatory Commission that, as to transmission costs, meets the objectives of subsection (c) of this section. Notwithstanding any other provision of this title, Commission approval is required prior to any interconnection under a large energy user tariff promulgated by a Commission-regulated electric utility under the provisions of § 317 of this title.

(c) It is the intent of the General Assembly that residential retail electric customers and all other industrial and commercial customers, other than large energy use facilities, should not bear the financial costs or risks associated with large energy use facilities interconnecting to the electric system serving this State and that a regulatory framework be established to ensure large energy use facilities enter into agreements to directly assign these costs. Towards that end, the Commission shall promulgate regulations to govern tariffs subject to the review and approval of the Commission that are applicable to large energy use facilities under the Commission’s jurisdiction, and to set forth the minimum protective features required to be included in an ESA and that must be included in the applicable transmission rate if a large energy use facility is entitled to take retail service in this State. The Commission regulations will identify specific form language to be incorporated into all ESAs, and such language shall ensure the protections set forth in § 317 of this title. At minimum, the ESA shall govern the terms and conditions under which the Commission-regulated electric utility will provide distribution service, interconnection, cost allocation, and risk mitigation associated with serving the large energy use facility. The ESA may not require the procurement of electric supply service from the Commission-regulated electric utility and nothing in the ESA may restrict a large energy use facility from procuring electric supply service from a certified electric supplier. The ESA must include all of the following provisions:

(1) Specify the duration of the contract, which must be a minimum of 10 years commencing after load ramp and a minimum of 15 years total including the load ramp period.

(2) Specify the date or estimated date that the Commission-regulated electric utility will begin to provide electricity service.

(3) Obligate the large energy use facility to pay a minimum amount or percentage of distribution charges, which cannot be less than 90% of contract capacity, based on the large energy use facility’s projected electricity usage for the electricity services the Commission-regulated electric utility is contracted to provide for the duration of the contract.

(4) For large energy use facilities that procure electricity from the Commission-regulated electric utility, obligate the large energy use facility to pay a minimum amount or percentage of supply costs, which cannot be less than 90% of contract capacity, based on the large energy use facility’s projected electricity usage for the electricity services the Commission-regulated electric utility is contracted to provide for the duration of the contract. This paragraph (c)(4) does not apply to a large energy use facility that procures electric supply service from a certified electric supplier.

(5) Specify that, for purposes of calculating its retail service charges and for allocating among the retail customers of the utility those transmission charges paid by the utility in accordance with federal law and tariffs on file with the Federal Energy Regulatory Commission, the large energy use facility’s annual capacity peak load contribution will be deemed to have been at least 90% of the contract capacity as adjusted by the applicable line loss factor and the large energy use facility’s annual network peak load contribution will be deemed to have been at least 90% of the contract capacity as adjusted by the applicable line loss factor.

(6) Specify the duration of the load ramp period during which a large energy use facility must reach full forecasted load and specify interim load levels the facility must meet at designated points during this period.

(7) Outline exit procedures that will apply to large energy use facility customers in the event of contract termination. Such procedures must include at least a 5-year advance notice of termination.

(8) Set exit fees that ensure the large energy use facility makes adequate contributions to offset all unrecovered costs in the event of contract termination.

(9) Require physical and operational readiness measures that facilitate targeted curtailment, including dedicated or otherwise segregable feeders where practicable; separation of any “critical” load segments behind the meter; and telemetry and communications capability sufficient for the Commission-regulated electric utility to execute and confirm curtailment actions during emergency operations.

(10) Establish enforceable curtailment and interruptibility obligations during emergencies and other circumstances determined by the Commission, Commission-regulated electric utility, or directed by the federal regional transmission system operator.

(11) Require bonding or letters of credit backed by an investment-grade entity, or other cash-equivalent financial guarantees to ensure protection of other customers in the event of bankruptcy, liquidation, or other circumstances that would prevent the large energy use facility from meeting its obligations under the ESA.

(12) Meet any other conditions the Commission may require in the public interest, including the extent to which the large energy use facility uses local labor that is paid a prevailing wage.

(d) In determining whether to approve an ESA, the Commission shall consider all of the following:

(1) Whether the ESA is consistent with regulations promulgated by the Commission governing ESAs.

(2) Whether the ESA, in combination with the underlying tariff, ensures that all applicable costs attributable to the large energy use facility are directly assigned to the large energy use facility. In making this determination, the Commission shall consider the results of any applicable incremental cost test, as provided for in § 317 of this title.

(3) Whether the ESA, in combination with the underlying tariff, provides protections necessary to ensure that other customers of the Commission-regulated electric utility are not placed at risk for paying stranded costs associated with the Commission-regulated electric utility serving the large energy use facility.

(4) The need for and impact of the project proposed by the large energy use facility on the safe, adequate, and reliable operation or delivery of electric supply services. The following shall be considered positive factors, but not requirements, in evaluating an ESA, if a large energy use facility constructs or causes the construction of new generation, where such new generation: (i)

a. Is located within Delaware or within the PJM Interconnection, L.L.C. (“PJM”) Delmarva Power and Light (“DPL”) transmission zone or within a transmission zone contiguous by land to the DPL transmission zone, with sufficient existing transmission infrastructure to deliver this additional electricity to Delaware;

b. Includes newly constructed generation at an existing facility, uprates, or repowering of deactivated or retired generating units as of June 12, 2026; provided that capacity that previously participated in the PJM base residual auction qualifies only to the extent attributable to such uprate or repowering;

c. Matches the megawatt demand of the large energy use facility;

d. Repurposes existing transmission interconnection infrastructure, land, or other generation-related assets associated with a prior in-state facility;

e. Is determined by this State Energy Office to be consistent with the achievement of this State’s greenhouse gas emissions reductions targets, as specified in § 10003 of Title 7; or

f. Is determined by the State Energy Office to be consistent with this State’s renewable portfolio standards, as specified in § 354 of this title.

It shall further be considered a positive factor in evaluating an ESA if a large energy use facility agrees to demand flexibility terms to assist with energy affordability, including demand flexibility during periods of dramatically increased wholesale electricity costs.

(5) The extent to which the large energy use facility will use a local labor force for construction and ongoing operation, and the extent to which the project will pay such labor force a prevailing wage.

(6) The impact of the large energy use facility on the area in which it is to be located, including the possibility that the large energy use facility provides a community benefits agreement to ameliorate any negative impacts.

(7) The impact of approving the ESA on this State’s economy, the impacts to this State’s ratepayers, and whether the application is consistent with the achievement of this State’s greenhouse gas emissions reductions targets, as specified in § 10003 of Title 7, and whether the application is consistent with this State’s renewable portfolio standards, as specified in § 354 this title.

(8) The impact of approving an ESA on the health, safety, and welfare of the general public.

(9) The demonstrated experience, operating expertise, and long-term viability of the large energy use facility or its affiliates, partners, or parent company.

(e) The Commission must act on an application to approve an ESA within 90 days of the submission of a completed application. For good cause shown, and if it finds that the public interest would be served, the Commission may extend the date of its action on an application for an additional period not to exceed 90 days. The application for approval of an ESA must be in writing, in such form as determined by the Commission, and contain such data, studies, documentation, or other information as the Commission shall prescribe. The application must include all of the following:

(1) The impact of the plan on transmission capacity.

(2) Upgrades, if any, to transmission or distribution infrastructure associated with the plan.

(3) The amount of electricity utilized by generation type and whether it is sourced from new or existing generation.

(4) How electricity use will be curtailed during high demand periods.

(5) The quantity and type of on-site back-up power, if any.

(6) The anticipated lifespan of the facility.

(7) Whether the business will trigger supplemental transmission projects.

(8) A study of the impact of the plan on electricity costs in Delaware.

(9) A study of the impact of the plan on grid reliability in Delaware.

(f) The Commission may revise and adjust its regulations in response to federal or PJM laws, rules, regulations, or tariffs regarding the introduction of large energy use facilities throughout the PJM region. The Commission may work to ensure that changes in capacity market operation, transmission cost allocation, or other processes at the PJM level will not, to the maximum extent possible, result in higher costs for Delaware ratepayers not included in the large energy use facility classification. Any adjustments to the tariff specified in § 317 of this title, or in the regulations governing ESAs, must aim to assure that any new obligations fall upon the class of energy users causing such obligations.

(g) A facility in operation as of August 26, 2026, may not be considered a large energy use facility. However, a change to an existing facility that increases the usage above the thresholds defined for a large energy use facility will trigger the provisions of this chapter requiring the approval of an ESA.

(h) An ESA may not be transferred from the applicant to another person or entity without the written approval of the Commission.

(i) Commission-regulated electric utilities shall be required to provide to the Commission annually detailed, project-specific information for each anticipated large energy use facility, including development status, evidence of financial commitment, ramp schedules, and any duplicative interconnection requests. The Commission shall submit a report listing the ESA applications received and their disposition for the prior year to the Governor, the Director and Librarian of the Division of Legislative Services, and the Secretary of the Senate and the Chief Clerk of the House for distribution to members of the General Assembly not later than December 31st of each year.

(j) ESAs and TSAs must be interpreted and administered in a manner consistent with Chapter 10 of this title, including the State policy of retail competition and direct access. Nothing in this section, § 317 of this title, or any regulation promulgated hereunder shall be construed to do any of the following:

(1) Limit or impair the right of any retail electric customer, including a large energy use facility, to purchase electric supply service from a certified electric supplier.

(2) Require a large energy use facility to procure electric supply service from a Commission-regulated electric utility.

(3) Condition interconnection, distribution service, or transmission service upon the customer’s agreement to take electric supply service from a Commission-regulated electric utility.

Collected 2026-09-19T02:15:20Z. Source file · JSON

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