Who pays for new infrastructure?

If a public utility or local government funds infrastructure for a private facility and the facility underperforms, the public absorbs the loss. Communities want cost responsibility written down before construction.

• Typical infrastructure needs include transmission and substation capacity, water and wastewater capacity, road improvements for construction traffic, and fiber routes.
• Utility infrastructure costs are allocated through the rate case and interconnection process; local infrastructure costs are allocated through development agreements.
• Well-structured agreements assign costs to the requesting customer, with security instruments and clawbacks if commitments are not met.
• Some upgrades genuinely benefit a wider area — a stronger substation or new fiber route can serve other employers. Shared benefit can justify shared cost, but it should be quantified rather than assumed.

• Write cost responsibility into the agreement before ground is broken.
• Require security, letters of credit or bonds proportional to public exposure.
• Include clawbacks tied to verified investment and employment.
• Separate what is genuinely a shared public benefit from what is project-specific.
• Publish the agreement.

• Interconnection and cost allocation filings

  Source: Kentucky Public Service Commission

• Development agreements

  Source: Local fiscal courts and city councils

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