Electric Utilities Shift Stranded-Asset Risk Away From Existing Customers

On October 30, 2026, Dominion Energy (D) and Exelon (EXC) both said on their third-quarter 2026 earnings calls that large data-center loads must make clearer financial commitments or accept project-specific costs before they can drive grid expansion.[1][2]

---

Utilities are testing customer commitment before building

Large data centers can request far more power than a local grid currently has available. Utilities therefore need to separate projects likely to proceed from requests that are not yet financed or may appear more than once in an interconnection queue. Building against an uncertain request could leave existing customers paying for underused assets if the project is canceled.

The emerging response is to require transmission security agreements, long-term payment obligations, or direct assignment of customer-specific construction costs. These tools turn a requested megawatt figure into a test of how much capacity a developer is prepared to support financially. Collateral can rise as a project advances, while longer-term payment terms make future utility revenue more predictable.

---

Dominion and Exelon both emphasize customer protection

Dominion said the Virginia State Corporation Commission approved its large-load framework. The framework is intended to make new customers pay a fair share of the investment needed for their growth while limiting cost shifts and stranded-asset risk.[1] This places the commitment requirement inside a formal regulatory structure.

Exelon said major developers are accepting its transmission security agreements and that collateral received has increased along with the number of projects.[2] Management described the agreements as a way to remove speculative load and prevent large-load development from raising rates for existing customers. Dominion and Exelon use different mechanisms, but both require the party requesting scarce capacity to assume a verifiable obligation.

“Matter of fact, the largest developers lean into our transmission security agreements and appreciate them because it removes a lot of the noise within the system. And they understand that they want to be good community partners and when you look at our TSAs across, the collateral that we've received has actually increased with the number of projects and that's exactly what they were intended to do. to take out the speculative load, show up as good community partners, and protect our existing customers from any rate increases because of large load development.”

---

Contract gates shape which grid projects advance

The commitment requirement moves a key control point in grid expansion to contracts and collateral. Projects willing to post security, accept long-term payments, or bear directly assigned costs are more likely to support multi-year transmission, generation, and distribution plans. If approved, that work can expand regulated utility rate base and create demand for electrical construction and equipment.

The boundary matters: these rules are spreading, but implementation differs by region, and queued gigawatts are not the same as committed capital spending. PPL has said PJM's proposed backstop still needed work, while Dominion has noted that existing transmission planning can sometimes absorb a reliability event without major incremental investment. Investors should follow contracted load, posted collateral, directly assigned costs, and approved capital projects rather than treating aggregate load requests as completed demand.

---

Companies exposed to the same mechanism

• American Electric Power (AEP): AEP also uses take-or-pay agreements and cash or collateral to qualify large loads, but signed capacity still does not guarantee that every project will enter service on schedule.
• PPL Corporation (PPL): PPL is assigning transmission costs tied to large loads directly to those customers, leaving prospective capital spending dependent on regulatory approval and project completion.
• Quanta Services (PWR): Approved transmission and interconnection programs can create electrical construction demand, but orders still depend on customer commitments and utility plans reaching the build stage.

---

Sources

[1] Drillr · Dominion Energy · 2026-10-30 · Q3 2026 earnings call

[2] Drillr · Exelon · 2026-10-30 · Q3 2026 earnings call

This is intended to help identify potentially overlooked industry changes and companies. It is not a stock recommendation.