Commonwealth Edison wants to up the ante for data center developers looking to cash in on the artificial intelligence wave.

The electric utility serving Northern Illinois wants to dramatically raise the deposit required for massive projects to discourage speculators from wasting its time and engineering resources on projects that may never come to fruition.

Demand for new data centers continues to soar, fueled by the introduction of generative AI such as ChatGPT and Claude, which require staggering computing power — and electricity.

The scale of the biggest data centers — built for the largest tech companies, known as hyperscalers — also has mushroomed. It’s no longer uncommon for a single data center project to require 1 gigawatt, or 1,000 megawatts, of electricity, which roughly equals the output from one of the nuclear reactors at Braidwood or enough to power 750,000 homes.

Not long ago, a data center requiring 100 megawatts would be considered huge. Large industrial projects, such as an electric vehicle battery factory or computer chip plant, might require 100 to 200 megawatts. The massive Illinois Quantum & Microelectronics Park, which envisions being home to multiple quantum-computing companies, could eventually require 350 megawatts.

ComEd says it is experiencing an unprecedented increase in demand for power from such mega-users. The utility has a pipeline of 75 projects that would consume 28 gigawatts of electricity if fully built out — an amount greater than ComEd’s record for peak usage of nearly 24 gigawatts. The company says it has received seven requests from users requesting 1 gigawatt of power.

“So our question is: How much of that potential demand is real?” CEO Gil Quiniones said in an interview with Crain's.

ComEd currently charges a $1 million refundable deposit for customers seeking 50 megawatts or more. The current amount already is likely the highest in the country. Under an application filed yesterday with the Illinois Commerce Commission, ComEd seeks a base deposit of $1 million for the first 50 megawatts, plus $500,000 for each 100 megawatts. A 1 gigawatt data center would pay $5.5 million.

If the customer builds the project, the deposit becomes a credit toward the cost of the project or down payments for equipment such as transformers. If the project doesn’t move forward, the deposit will be refunded, minus any engineering costs already incurred.

ComEd says it costs $1 million to $3.5 million to do the engineering work for such large projects, which generally require substations, increased transmission capacity and other infrastructure.

“Part of what we want to do is discourage pure speculators,” says Max Leichtman, director economic development for ComEd, although he acknowledges there haven’t been many customers who haven’t followed through with big projects so far.

“We have good relationships with large hyperscalers and data center developers, and we have quite a few applications from them. “We have applications from people who are simply landowners and seem to be investment funds. In those cases, we’ve got more questions about (whether they) are able to attract someone who can truly use the power they’re requesting.”

Timothy Comerford, a consultant at Biggins Lacy Shapiro in Princeton, N.J., says deposits for projects he works on generally range from $10,000 to $250,000.

"More recently the amount of deposits have increased significantly," he says. "In addition, a couple of utilities are now requiring contracts where the actual load must reach 85% of the requested load. Otherwise, they pay the demand charges."