FERC moves to rewrite how data centers connect to the power grid

Overview

Updated Jun 18

For decades, the cost of upgrading the power grid was spread across everyone's electric bill. On June 18, the Federal Energy Regulatory Commission (FERC) acted on a rule that could put much of that cost on the data centers that trigger it.

The rule sets national terms for plugging giant electricity users into the interstate grid. It decides how fast they connect, who pays for new wires, and whether Washington or the states call the shots. The outcome shapes electricity bills and AI buildout for years.

Why it matters

How fast AI data centers get power, and whether their grid costs land on your electric bill or theirs, now turns on this federal rule.

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Key Indicators

20 MW

Large-load threshold

Demand above 20 megawatts would fall under the proposed federal rules.

100%

Participant funding

Share of triggered grid-upgrade costs the proposal would put on the large load itself.

60 days

Proposed study window

Target time to complete an interconnection study for flexible loads willing to curtail.

30–300 MW

Threshold range debated

Range commenters proposed instead of 20 MW, to avoid sweeping in midsize factories.

Voices

Curated perspectives — historical figures and your fellow readers.

Ever wondered what historical figures would say about today's headlines?

People Involved

Laura V. Swett

Chair, Federal Energy Regulatory Commission

Leading FERC's action on the large-load rule

Chris Wright

U.S. Secretary of Energy

Directed FERC to start the rulemaking

Mark Christie

Former FERC chair and rule critic

Public opponent of the approach

Organizations Involved

Federal Energy Regulatory Commission (FERC)

Federal regulatory agency

Writing the national rule

FERC is the U.S. agency that regulates the interstate transmission and wholesale sale of electricity.

U.S. Department of Energy

Federal agency

Initiated the directive

The Department of Energy sets national energy policy and used a rare statutory power to push this rule.

Timeline

October 2025 June 2026

5 events Latest: June 18th, 2026 · 3 months ago

Tap a bar to jump to that date

June 2026
FERC acts on the rule
Latest Regulatory

At its monthly open meeting, FERC took up the large-load docket, moving a national framework for data-center grid connections from proposal toward execution.
June 18th, 2026
April 2026
FERC commits to a June deadline
Process

FERC issued an order saying it intended to deliver a legally durable order on the docket by the end of June 2026.
April 16th, 2026
December 2025
FERC order on PJM co-located loads
Legal

FERC issued an order in a related case on large loads sharing sites with generators in the PJM grid region.
December 18th, 2025
November 2025
Public comment deadline
Process

Utilities, states, manufacturers, and tech firms filed comments. They split over the 20 MW threshold, cost allocation, and federal authority.
November 14th, 2025
October 2025
DOE directs FERC to act
Directive

Energy Secretary Chris Wright used a rare statutory power to direct FERC to write rules speeding large-load connections. A draft proposal came attached.
October 23rd, 2025

Scenarios

FERC finalizes 100% participant funding, data centers pay their own upgrades

Possible Resolves by Q2 2027

Discussed by: CSIS analysts; energy law firms tracking the docket

FERC issues a final rule keeping the core idea: large loads pay the full cost of the grid upgrades they trigger. Tech firms get faster, more predictable connections. Manufacturers and some utilities warn the bill is too heavy for capital-intensive plants. The rule still faces near-certain court challenge.

Court stays or vacates the rule on state-authority grounds

Possible Resolves by Q2 2028

Discussed by: Former FERC chair Mark Christie; state utility regulators

States and utilities sue, arguing FERC reached past its authority into retail service they have always controlled. A federal appeals court stays or throws out the rule. The case echoes past jurisdictional fights over how far FERC's power extends. A loss would send the agency back to the drawing board.

FERC softens to a hybrid cost-sharing model

Possible Resolves by Q2 2027

Discussed by: State commissions, utilities, and technology firms in filed comments

Faced with pushback, FERC adopts a middle path. Large loads fund upgrades upfront but earn refunds or credits when their facilities later benefit the wider system. The compromise eases the burden on industrial users while keeping cost-causation as the guiding rule.

Action stalls at a proposal, no final rule within a year

Possible Resolves by Jun 18, 2027

Discussed by: Holland & Knight and Troutman energy practices

The June action turns out to be a notice of proposed rulemaking, not a final order. Another comment round follows. Disputes over thresholds and jurisdiction drag the timeline. No binding rule lands within a year, leaving developers and utilities in limbo.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

July 2011

FERC Order 1000 (2011)

FERC required regions to plan transmission together and to allocate the cost of new lines to those who benefit. States and utilities objected that the agency was dictating how local grids get built and paid for.

Then

Dozens of parties challenged the rule in court.

Now

A federal appeals court upheld it in 2014, cementing FERC's role in regional cost allocation.

Why this matters now

The current fight is again about who pays for grid upgrades. Order 1000 shows FERC can win cost-allocation battles, but only after years of litigation.

January 2016

FERC v. Electric Power Supply Association (2016)

The Supreme Court reviewed a FERC rule paying electricity users to cut demand. Challengers said FERC had crossed into retail markets reserved for states. The Court disagreed, 6-2.

Then

The ruling let FERC keep regulating demand response in wholesale markets.

Now

It set the boundary for how far FERC can reach toward the customer side of the meter.

Why this matters now

The large-load rule tests that same line. This case is the precedent both sides will cite on whether FERC can regulate big loads.

September 2020

FERC Order 2222 (2020)

FERC ordered grid operators to let small, distributed resources like home batteries compete in wholesale markets. States and utilities warned it intruded on their control of local distribution systems.

Then

Grid operators spent years rewriting market rules to comply.

Now

Implementation is still rolling out region by region, slowed by the federal-state seam.

Why this matters now

Like the large-load rule, Order 2222 pushed federal authority toward resources states had managed. It shows how slow these national frameworks are to take effect.