FERC Orders Grid Operators to Revamp Rules for Data Centers and Large Power Users

The Federal Energy Regulatory Commission on June 18 directed the nation’s six regional grid operators to justify existing rules or propose reforms aimed at accommodating rapidly growing demand from data centers, advanced manufacturing facilities, and other energy-intensive customers. The action reflects mounting concerns that existing transmission planning and service processes are not keeping pace with the scale and speed of new electricity demand emerging across the country.

The commission issued separate orders to each grid operator, recognizing that regional markets face different reliability challenges, generation portfolios, and infrastructure needs. Rather than imposing a uniform framework, the regulator outlined key policy areas that each operator must address while retaining flexibility to develop region-specific solutions.

The orders focus on five policy areas, including improving transmission service applications and study procedures, increasing transparency around transmission costs, accommodating facilities paired with on-site generation, creating transmission services for flexible large loads, and establishing processes to evaluate generating resources serving nearby large customers. Within 60 days, grid operators must either demonstrate that existing tariffs are just and reasonable or submit proposed revisions. Separate informational filings due within 30 days must explain how sufficient generation resources will be maintained to serve existing and anticipated demand.

The initiative advances broader federal efforts to accelerate infrastructure development needed to support artificial intelligence, domestic manufacturing, and expanding electrification. The commission cited extensive stakeholder engagement and review of thousands of public comments in developing the action.

The latest orders build on recent commission actions addressing large-load growth, including requirements for clearer rules governing facilities paired with generation in the PJM region and approval of new study processes for major electricity users in the Southwest Power Pool.