Item 10- Staff Briefing: Connecting Large Customers — original pdf

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Connecting Large Customers David Tomczyszyn Vice President Electric System Engineering and Technical Services Stephanie Koudelka Interim Senior Vice President and Chief Financial Officer February 2026 © Austin Energy Item 10Large Load Customer Growth is Nationwide 2 Large Electric Loads in ERCOT and Nationwide Utilities are being asked to connect record-sized loads, faster than ever before, in places where the grid wasn’t built to handle them Grid Capacity Limits Existing lines and substations may not have the capacity to handle large load additions Supply Chain Lead Times Equipment necessary to upgrade the grid has long lead-times and is challenged by recent issues like supply chain and tariffs Speed of Requests Many customers want service within 1-2 years, while transmission planning, regulatory approvals and construction can take 3-5+ years Stranded Costs Some industries are volatile or ‘shopping around’, so utilities risk building infrastructure for loads that may not fully materialize Generation Adequacy Adding large new load can require new generation resources when Austin already needs additional local resources 3 Texas Senate Bill 6 (2025) Large Electric Loads Bill aimed to make the ERCOT grid more reliable by addressing issues raised by large electrical loads – 75MW or more. The goal was to balance economic growth with grid reliability and fair cost allocation. Key provisions: • Cost sharing: Large load customers must help pay for connecting to the grid. • Interconnection standards: The Public Utility Commission (PUC) will develop standards for interconnecting large load customers. • Backup power: During weather emergencies or blackouts, large electricity users may have to shut down operations or use off-grid backup power. Large Customer Requests Less Than 75MW Austin Energy requires local studies, costs and obligations be met Local Studies Local Costs Local Obligations • Determine necessary upgrades • Connect only what meets criteria 100% extension costs covered by large load customer Large load customers must do their share for curtailment obligations when needed 5 Contribution in Aid of Construction CIAC Policy Adopted by City Council Customer Pays 100% of Infrastructure Costs Exemption for Certified Affordable Housing 6 City Code Cleanup 2003 City Code Required 50% refundable deposit + 50% infrastructure cost recovery for 4MW requests and above 2014 Council Resolution Requires 100% cost recovery for infrastructure Repeal of 2003 City Code is Necessary To align with industry practice, eliminate inconsistency, and continue to protect current customers 7 ©Austin Energy. All rights reserved. Austin Energy and the Austin Energy logo and combinations thereof are trademarks of Austin Energy, the electric department of the City of Austin, Texas. Other names are for informational purposes only and may be trademarks of their respective owners.