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ComEd implements 10-year letter of credit requirement for data center power connections
Wednesday, January 7, 2026 at 02:22 PM
ComEd is now requiring data center operators to provide a 10-year letter of credit before securing a grid connection to protect existing ratepayers from infrastructure costs. So far, eight firms have agreed to these terms for a total of 6.5 GW of capacity, while three firms declined. This measure aims to filter out speculative projects in the interconnection queue and covers approximately $2 billion in potential transmission investment risks.
Context
Exelon subsidiary ComEd has introduced a mandatory 10-year letter of credit for data center developers seeking grid connections. This policy shift addresses the "phantom data center" issue, where speculative projects clog interconnection queues without a guaranteed path to completion. By requiring upfront financial commitments, the utility ensures that the heavy costs of transmission upgrades remain the responsibility of the developer, protecting existing ratepayers from shouldering the financial burden if a project fails or is abandoned mid-construction.
So far, 8 firms have agreed to these terms, representing a combined 6.5 gigawatts of power demand, while 3 firms opted to exit the queue. This mechanism shields current customers from over $2 billion in potential transmission costs. For investors in the AI and semiconductor supply chain, this move highlights the growing bottleneck of energy infrastructure and suggests a new industry standard where only the most well-capitalized hyperscalers can secure the massive power loads required for next-generation facilities.
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