Florida utility connection and power contracts for AI data centers

In short

Florida has a new law, SB 484, that creates a framework for how the state’s public utilities must connect and charge large electricity users like AI data centers. The law applies to any customer with an anticipated monthly peak load of 50 megawatts or more. The law itself sets minimum tariff requirements that make sure these large load customers pay their full cost, and utilities must file tariffs complying with those requirements for Florida Public Service Commission approval by October 1, 2026. Separately, the sales tax exemption for AI data center equipment and electricity now only applies to projects with an IT load of 100 megawatts or higher. HB 7031 bill summary, HB 7031 bill summary, Fla. Stat. § 212.08(5)(s) Real projects like the Fort Meade campus show the legal and local road ahead.

SB 484 enrolled text, SB 484 bill page

What is the new Florida law on large electrical loads

The Florida legislature passed SB 484 during the 2026 session and it became Chapter 2026-65 when the Governor signed it on May 7, 2026. It took effect on July 1, 2026. The law creates a new section of the utility code, section 366.043, that defines a large load customer and imposes minimum tariff requirements that public utilities must include in their tariffs for those customers. SB 484 bill page

A large load customer is any customer of a public electric utility whose anticipated monthly peak load reaches 50 megawatts or more. That peak is calculated at a single location as the highest average load over a 15 minute interval. Fla. Stat. § 366.043(2)(d)

The same 50 megawatt threshold is used to define a large scale data center in the water resources code, which brings separate permitting rules. Fla. Stat. § 373.203(4)

A customer cannot split what is really one electrical load into several smaller connections just to stay under the 50 megawatt line. Fla. Stat. § 366.043(4)

The law also requires that the minimum tariff and service requirements in public utility tariffs must reasonably ensure that each large load customer bears its own full cost of service and that such cost is not shifted to the general body of ratepayers. Fla. Stat. § 366.043(3)

Each public electric utility must file a tariff that follows the law for PSC approval by October 1, 2026. Fla. Stat. § 366.043(8) That gives utilities a few months after the law takes effect to get their filings ready.

The table below shows the main power thresholds that now apply to AI data centers in Florida.

What must a large load tariff include

The law lists a set of tools the PSC may require. The aim of every one is to make the large load customer pay the real cost of serving its electricity demand, including any new generation, transmission lines, and substations that must be built.

The elements a tariff may include are these.

• Contributions in aid of construction, often called CIAC. The customer pays money upfront to cover the cost of extending or upgrading utility infrastructure to reach its site.
• Demand charges or minimum charges. The customer pays for a minimum amount of power even if it uses less.
• Incremental generation charges. The customer funds the full cost of any new power plant capacity added specifically to serve its load.
• Financial guarantees. The customer must provide credit support, such as a letter of credit or a cash deposit, so the utility is protected if the project fails.
• Minimum load factors. The customer must keep its electricity use at a certain percentage of its peak demand, which helps the utility plan and build only what is truly needed.
• Take or pay provisions. The customer agrees to pay for a set amount of power whether it actually uses it or not.
• Minimum service term requirements and early termination fees. The contract lasts a fixed number of years, and leaving early triggers a large exit payment.

The law also lets the PSC approve other industry accepted ratemaking and financial tools. Fla. Stat. § 366.043(5)

These are not all mandatory in every tariff. The PSC decides which ones are needed, and each utility can put forward its own proposal as long as it meets the law’s bottom line that the large customer carries its own costs.

What is the foreign entity restriction

The law bars a public utility from knowingly providing electric service to a large load customer that is a foreign entity. A foreign entity is one that is owned or controlled by the government of a foreign country of concern or organized under the laws of or having its principal place of business in such a country, or a subsidiary of such entity. The list of foreign countries of concern includes China, Russia, Iran, North Korea, Cuba, Venezuela under the Maduro regime, and Syria. Controlled by means having the power to direct or cause the direction of the management or policies of a company, whether through ownership of securities, by contract, or otherwise. A person or entity that directly or indirectly has the right to vote 25 percent or more of the voting interests of the company or is entitled to 25 percent or more of its profits is presumed to control the entity. Fla. Stat. § 366.043(2) and (7)

So an AI data center project backed by an entity from one of those countries, or even partly owned above that 25 percent threshold, cannot get service from a Florida public utility.

How does the law treat cost shifting and grid reliability

The central rule is that large load customers must pay their own way. The tariff requirements are all built to stop what the law calls a shift of costs to the general body of ratepayers. Fla. Stat. § 366.043(3)

The law also says that no tariff, contract, or policy may prevent the utility from curtailing or interrupting service to a large load customer when needed for grid stability, to reduce wider outages, or for public safety during emergencies. Fla. Stat. § 366.043(6) A data center must accept that its power can be cut off if the grid is in trouble.

How does SB 484 affect local land use and water

Local governments keep their authority over comprehensive planning and land development regulation for these projects. The law makes one specific limit. A large load customer cannot be classified as an electric substation for zoning purposes. That provides that a large load customer may not be considered an electric substation for purposes of s. 163.3208 and that local governments maintain authority over land development regulation for such customers. Fla. Stat. § 163.326

Water use gets a separate set of new rules. The law defines a large scale data center using the same 50 megawatt anticipated monthly peak load. A water management district or the Department of Environmental Protection may not issue a consumptive use permit to a large scale data center if the proposed use would harm water resources or violate local regulations. They must require the use of reclaimed water where it is feasible. And any modification of a consumptive use permit by a large scale data center is treated like a brand new initial application, not a simple change, so it goes through full review. Fla. Stat. § 373.203, Fla. Stat. § 373.262, Fla. Stat. § 373.239 That can add time and regulatory risk to expansions.

How do Florida utilities handle large loads today

Florida has four investor owned electric utilities regulated by the PSC. They are Florida Power and Light, Duke Energy Florida, Tampa Electric Company, and Florida Public Utilities Corporation. SB 484 Bill Analysis Municipal utilities and rural electric cooperatives are not fully regulated by the PSC for rates. The new law applies to public electric utilities, so municipal utilities are outside its direct reach. Fla. Stat. § 366.043, Fla. Stat. § 366.02

Two of the big investor owned utilities have already moved on large load tariffs, one has a proposal pending, and one operates under general rules.

FPL Large Load Contract Service tariffs

FPL filed and settled a rate case in late 2025 that created two new tariffs for large loads, LLCS-1 and LLCS-2. The PSC approved them on January 22, 2026, effective January 1, 2026. PSC Final Order No. PSC-2026-0022-S-EI

The LLCS tariffs apply to customers with projected new or incremental load of 50 megawatts or more and a load factor of at least 85 percent. EEI Large Load tracker

Here are the core economic terms.

• The minimum contract term is 20 years. Florida Politics, FPL LLCS Overview, FPL LLCS Overview
• A take or pay demand charge applies at 70 percent of contracted demand. The AI data center must pay for at least 70 percent of the power it reserved even if it uses less. The original proposal was 90 percent. The settlement with data center developers and other parties reduced it. FPL Settlement Agreement § 6(b), FEIA prehearing statement
• An incremental generation charge requires the AI data center to pay 100 percent of the cost of any new generation capacity built for its load. Florida Politics
• Exit fees accelerate the remaining incremental generation charge over the full 20 year term. Leaving early is very expensive. Florida Politics
• Strict credit support. The customer must meet strict collateral requirements tied to their credit to reserve capacity, must pay the full incremental generation charge, and must pay upfront for an engineering study and all project costs to connect. Florida Politics

FPL has identified the first of three geographic zones near existing 500 kV transmission lines to minimize network upgrade costs for large loads. Florida Politics

The rates under LLCS are materially higher than FPL’s standard large commercial tariff, known as GSLD-3. Under the original proposal, LLCS rates were more than 69 percent above GSLD-3, which was around 5.98 cents per kilowatt hour. FEIA post-hearing brief The exact final rate in cents per kilowatt hour was not publicly verified in a simple figure, but the premium is significant.

AI data centers with loads under 50 megawatts may remain on GSLD-3. FPL Post-Hearing Settlement Brief But once SB 484’s tariff requirements are written for all utilities, even a sub 50 megawatt facility could face new terms later.

FPL reports that it has received inquiries from more than 50 potential large load customers, representing about 21 gigawatts of load. E&E News

Duke Energy Florida proposed Large Load tariff

Duke Energy Florida filed a petition in September 2025 for a new customer class called Large Load Customer, rate schedule LLC-1. The rate schedule would apply to customers with billing demands of 1,000 kilowatts or more served at a transmission voltage of 230 kilovolts or higher. The Large Load Customer Policy would apply to customers with demands of 100 megawatts or more. The proposal includes a Large Load Customer Policy that requires a contract with refundable capital advances, minimum billing, termination charges, and credit support. Duke also asked to change its contribution in aid of construction rules so it could at its discretion require large load applicants to advance up to the full estimated cost of any extension, refundable over up to five years. Duke Energy Florida Docket 20250113-EI

Duke stated it did not yet have any large load AI data center customers in Florida and filed proactively. Florida Municipal Electric Association The proposed effective date is January 2028. The petition was still pending with the PSC as of May 2026.

TECO general large customer rules

Tampa Electric Company has not filed a separate large load tariff for AI data centers as of May 2026. Its existing rules require a contribution in aid of construction when a customer requests a service voltage that is not standard in the area. The customer pays the cost difference between the requested service and standard service. TECO also prohibits conjunctive billing. That means a customer with more than one point of delivery gets separate bills for each one. TECO tariff Section 5 TECO will need to file a compliant tariff by October 1, 2026 under SB 484.

How does the sales tax exemption for data centers work now

Florida offers a sales and use tax exemption for data center property. The property covered includes servers, networking equipment, cooling and power equipment, construction materials, and electricity. Fla. Stat. § 212.08(5)(s)

Until August 2025, an AI data center qualified if it met a cumulative capital investment of $150 million within five years of starting construction and had a critical IT load of 15 megawatts or more with at least 1 megawatt per tenant. Florida Department of Revenue rule

In 2025, the legislature passed HB 7031, effective August 1, 2025. That bill raised the IT load threshold from 15 megawatts to 100 megawatts. There is no grandfather clause. Any AI data center with an IT load under 100 megawatts lost the exemption entirely on that date, even if it had already been certified or was under construction. Florida House final bill analysis, Tax alert

The $150 million capital investment threshold remains unchanged. HB 7031 Final Bill Analysis

The exemption does not cover the tax on renting real property under section 212.031. So an AI data center operator still pays sales tax on the rent for its space. Florida Sales Tax blog

To claim the exemption, an AI data center must get a permanent Data Center Property Certificate of Exemption, Form DR-14DCP, from the Florida Department of Revenue. There is a temporary certificate, Form DR-14TDCP, obtained through application Form DR-1214DCP, and a permanent certificate application, Form DR-5DCP. The Department reviews compliance every five years, and the certificate holder must submit a written declaration that the IT load requirement continues to be met. Fla. Admin. Code R. 12A-1.108

The deadline to receive an AI data center sales tax exemption certificate is June 30, 2037. Florida Senate bill summary For a project that will not be fully operational and certified before mid 2027, the exemption’s future is uncertain.

What real Florida projects show how these rules play out

Several large AI data center projects are moving through local approvals across Florida. They face a mix of utility demands, local opposition, and state scrutiny that shows the practical effect of the new legal landscape.

• Fort Meade Data Center Campus, Polk County. Developer Stonebridge secured city commission approval on April 14, 2026. The $2.6 billion campus could reach 4.4 million square feet on roughly 1,300 acres of former phosphate land. It would need about 1.2 gigawatts of electricity from Duke Energy’s Hines Complex. The project still needs a consumptive use permit from the Southwest Florida Water Management District. The Florida Commerce Secretary called it fundamentally flawed. Sun Sentinel, Pensacola News Journal, The Ledger, LkldNow, Florida Data Centers

• Sentinel Grove Technology Park, also called Project Jarvis, St. Lucie County. A proposed $13.5 billion hyperscale campus of 15 million square feet on 1,218 acres. It had a 20 year development agreement and a $150 million ten year tax break but was withdrawn in February 2026 pending state legislation and after local pushback. It would have been served by Florida Power & Light. Florida Trend

• Central Park Commerce Center, also called Project Tango, Palm Beach County. A 3.7 million square foot campus with 11 AI data center buildings on 202 acres near FPL’s West County Energy Center, a 3,750 megawatt natural gas plant. The final local vote has been postponed three times and is now set for July 15, 2026. The identity of the end user is shielded under a 2017 Florida statute. Florida Data Centers

• Atlas Compute, St. Lucie County. A Miami based startup is considering a 200 megawatt AI data center on vacant industrial land with plans for on site power generation. The project is in early planning. Pensacola News Journal

• Cielo Haines City Data Center, Polk County. A planned 300 megawatt facility by Cielo Digital Infrastructure. Cleanview

These projects show the friction. SB 484’s tariff requirements will apply to many of them once they reach the 50 megawatt threshold. Local opposition is strong. Water permitting is a real gate.

What is coming next from the state

The law requires an independent study by the Office of Program Policy Analysis and Government Accountability, known as OPPAGA. It must cover economic development, tax revenues, land, water, energy use, cost and rate impacts, and public health effects of large scale AI data centers. The study is due to the Governor and legislative leaders by July 1, 2027. SB 484 bill page That study could lead to further legislation or regulation.

One other change already in effect limits the confidentiality of economic development information for data centers. Other economic development projects can get a 12 month extension on the time their records stay confidential. AI data centers are expressly denied that extension. Fla. Stat. § 288.075(2)(a)2 So key project details become public sooner.

Key takeaways

• Florida’s new large load law applies to any customer with a 50 megawatt anticipated monthly peak load. AI data centers meeting that threshold will face strict tariff requirements designed to prevent cost shifting.
• Utilities must file compliant tariffs by October 1, 2026. FPL already has its LLCS tariffs in place, with a 20 year term, 70 percent take or pay, and full incremental generation cost recovery.
• Duke Energy and TECO will need to file their own tariffs. Developers should anticipate similar cost recovery and guarantee structures.
• The foreign entity prohibition bars AI data centers with 25 percent or more ownership or profit interest from China, Russia, and other listed countries from getting electric service.
• Water use for large scale data centers now faces a reclaimed water mandate and stricter permitting, making site selection more complex.
• The sales tax exemption for data centers now requires a 100 megawatt IT load and is not grandfathered. Projects under that threshold lost the exemption in August 2025, raising power and equipment costs.
• The OPPAGA study in 2027 could lead to additional regulation or incentives, so monitor its progress.

Frequently asked questions

Q:What counts as a large load customer in Florida?

A:A large load customer is a customer with an anticipated monthly peak load of 50 megawatts or more, calculated as the highest average load over a 15-minute interval at a single location. Fla. Stat. § 366.043(2)(d)

Q:When do utilities have to file new tariffs for large loads?

A:Each public electric utility must file a tariff that complies with § 366.043 for PSC approval by October 1, 2026. Fla. Stat. § 366.043(8)

Q:What is a take or pay provision?

A:A take or pay provision means the AI data center agrees to pay for a set amount of power whether it actually uses it or not. Under FPL’s approved LLCS tariffs, the minimum take or pay charge applies at 70 percent of the contracted demand. 2025 Stipulation and Settlement Agreement, Florida PSC Docket 20250011

Q:Can an AI data center avoid the 50 megawatt threshold by splitting its load?

A:No. The law says a customer may not separate an electrical load at a single location into multiple smaller connections to avoid being classified as a large load customer. Fla. Stat. § 366.043(4)

Q:What happens if an AI data center wants to leave its contract early?

A:Under FPL’s LLCS tariffs, early termination triggers an accelerated payment of the remaining incremental generation charge for the 20 year term. Florida Politics The cost is designed to make early termination uneconomic.

Q:Does the sales tax exemption still apply to electricity for data centers?

A:Yes, but only if the AI data center meets the 100 megawatt IT load threshold. The exemption covers electricity along with equipment and construction materials. Data centers below 100 megawatts lost the exemption effective August 1, 2025. Tax alert

Q:Can a local government stop an AI data center from being built?

A:Yes. Local governments keep their authority over comprehensive planning and land development. SB 484 says only that they cannot classify a large load customer as an electric substation for zoning purposes. All other land use powers remain. Fla. Stat. § 163.326

Q:Are municipal utilities subject to SB 484?

A:No, not directly. The law applies to public electric utilities regulated by the PSC. Municipal utilities and rural electric cooperatives are not fully subject to PSC rate jurisdiction. Their large load connection policies are a separate question. Senate Bill Analysis, CS/SB 484

Q:What is the OPPAGA study and when is it due?

A:The law orders an independent study of large scale AI data center impacts on economic development, tax revenues, land, water, energy, costs, and public health. OPPAGA must deliver the study by July 1, 2027. SB 484 bill page

Q:What if an AI data center is partially owned by a company from a restricted country?

A:If the entity is owned or controlled by the government of a foreign country of concern, or organized under the laws of or has its principal place of business in a foreign country of concern, the utility may not knowingly provide electric service to it. An entity is presumed controlled by a person or entity that holds 25 percent or more of its voting interests or is entitled to 25 percent or more of its profits. The list of foreign countries of concern includes China, Russia, Iran, North Korea, Cuba, Venezuela under the Maduro regime, and Syria. Fla. Stat. § 692.201(3)

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Junde Liu, JD, LL.M. (Taxation) candidate at UF Law. Originally published on Compute Law Blog. This article is general information and does not constitute legal advice. Reading it does not create an attorney client relationship. The reader should not act on the basis of any content here without first consulting a licensed attorney in the relevant state. Last reviewed for accuracy May 23, 2026.