FERC Targets Grid Rules for Data Centers and Large Loads

The Federal Energy Regulatory Commission ordered the nation's six largest grid operators to either defend their current rules for connecting large power users to the grid or propose reforms within 60 days, and to submit plans within 30 days explaining how they will ensure sufficient electricity generation for growing demand from large new loads. This action addresses concerns that existing interconnection and planning processes were not designed for the scale of electricity demand from data centers and other power-intensive facilities driven by artificial intelligence growth. The commission identified five specific areas where regional tariffs may need reform, including transmission service processes, cost-allocation mechanisms to prevent existing customers from subsidizing new large loads, and arrangements for co-located generation near data centers. The proceeding affects markets serving roughly 200 million Americans across more than 30 states and the District of Columbia and covers nearly two-thirds of electricity demand under commission-jurisdictional rates.