Pennsylvania Regulators Open a Rewrite of the Rules That Decide Which Customers Get Curtailed First

On September 10 the Pennsylvania Public Utility Commission voted unanimously to direct staff to draft updates to the state’s emergency electric load control regulations. The instruction is narrow in wording and broad in consequence: the Commission wants clarity on “the order, criteria and circumstances under which customers may be curtailed” during pre-emergency and emergency conditions.

The Law Bureau and the Bureau of Technical Utility Services must produce a Tentative Order for the Commission’s October 1, 2026 public meeting. That document is the first point at which the shed order becomes a public text rather than an internal utility practice.

The instruction. Emergency load control in Pennsylvania has operated as a set of procedures administered at the utility level. The Commission’s September action asks staff to specify the order, the criteria and the circumstances that govern curtailment, which is a different exercise from confirming that each utility maintains a procedure. A commercial building owner in PPL, PECO, Duquesne Light or FirstEnergy territory has had no regulated mechanism for learning which block a given service address sits in, or whether the answer differs between two buildings in the same portfolio served by two different utilities. Standardizing the order converts an operating practice into a published attribute of a meter.

Involuntary curtailment versus paid demand response. The distributed storage industry has built its commercial revenue models on voluntary load reduction: demand response enrollment, capacity obligations, peak-shaving tariffs. Those constructs share a structure in which the customer opts in, dispatches on notice and receives payment.

Firm load shedding in a declared emergency is the opposite structure. It is involuntary, it carries no compensation, and it arrives with minimal warning. On the available record, the commercial building segment has had little reason to underwrite against that exposure, because until a commission writes the ordering down there is no disclosed risk to price. Pennsylvania has now started writing it down. That is an assessment of where the market stands rather than a documented count of products sold.

Cost allocation in the same package. The curtailment rulemaking was one of several actions taken at the same meeting. The Commission also approved a second motion creating a working group on ratemaking improvements focused on transparency and affordability, and directed staff to convene a technical conference on data-center cost allocation. Pennsylvania had already issued a large load model tariff framework earlier in 2026, and the September motions extend that work in two directions at once: who pays for the new load, and who is shed when the new load cannot be served.

Those questions are connected. If large new loads are the stated reason the curtailment framework requires modernizing, then the position of those loads in the shed order is a term with a price, and every other customer class is negotiating against it inside the same proceeding.

Memphis. The priced version of a curtailment obligation already exists at scale. Satellite imagery from July 11 showed 720 Tesla Megapacks at xAI’s Colossus 2 campus near Southaven, Mississippi, an estimated 2.8 GWh with 720 to 1,400 MW of discharge capability; company figures for the site range from 2 GWh to 3.3 GWh. Memphis Light, Gas and Water serves the campus through a power-interruption program. The utility’s chief executive has described the site as holding “2,000 MW of batteries behind the meter” and able to come off the grid for four hours during peak demand. The TVA board approved a direct grid hookup on August 20, and as of September 11 the batteries were not yet grid-connected.

The battery in that configuration is not shaving a billed peak. It is making an interruption obligation survivable, which is what makes the interruptible service worth taking in the first place. The structure is available to a load measured in hundreds of megawatts. A mid-sized office building in Allentown cannot buy an interruptible tariff, cannot see its shed tier, and has no counterparty offering to price the difference.

Commercial load growth. The Energy Information Administration’s September 2026 Short-Term Energy Outlook forecasts commercial-sector electricity sales growth of 3.3 percent in 2026 and 2.7 percent in 2027, with the commercial and industrial sectors together accounting for 63 percent of total sales growth this year and 56 percent next year. EIA identifies the West South Central region, driven by Texas data centers and manufacturing, as the strongest source of both commercial and industrial increases.

Commercial load is therefore expanding inside a curtailment framework that has never specified the class’s position, and inside a rate structure where peak-driven distribution capital is recovered through kilowatt charges levied on that same class. The Pennsylvania ratemaking working group is the venue where those charges get reopened. A transparency-and-affordability mandate can cut either way: it can surface demand charges as a cost commercial customers should be able to manage, or it can push toward fixed charges that flatten the difference between a managed peak and an unmanaged one.

The record. The comment window that follows the October 1 Tentative Order is the point in this cycle at which a commercial customer can put a position on the record. The cost of participating is a filing rather than a project, which is a lower threshold than any of the hardware decisions downstream of it.

Emergency load control regulations were drafted for a world in which a load emergency was a supply-side engineering event, the order of shedding was a dispatch judgment, and no customer was paying anything to sit higher in the queue. Once a customer is paying, whether through an interruptible rate, a curtailment service or a battery bought specifically to absorb the event, the ordering stops being an engineering judgment and becomes a rate.

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