FERC large load rules explained: how data centers may connect

For decades the US had a standard process for connecting power plants to the grid but none for connecting very large customers. Since October 2025 that has been changing. The Department of Energy proposed federal rules, and in June 2026 the Federal Energy Regulatory Commission ordered all six regional grid operators to justify or reform their rules.

This post explains what was proposed, what FERC actually ordered, which numbers matter, and what is still undecided as of 19 October 2026. It relies on the Department of Energy's letter and on law firm summaries of FERC's orders, and it flags where those summaries disagree.

Key numbers at a glance

• 20 MW: the large load threshold in the Department of Energy's proposal to FERC, sent 23 October 2025 (DOE letter and proposed rulemaking).
• 30 April 2026: the date DOE asked FERC to take final action (same letter).
• More than 3,500 pages: public comments FERC reviewed in the rulemaking docket RM26-4-000 (FERC statement as summarized by Troutman Pepper Locke, April 2026).
• 16 April 2026: FERC said it would act by the end of June 2026 (same Troutman summary).
• 18 June 2026: FERC issued six show cause orders, one each to PJM, MISO, SPP, CAISO, ISO New England and NYISO (Vinson and Elkins; Husch Blackwell).
• Nearly two thirds: the share of FERC jurisdictional load served by those six regions (Vinson and Elkins).
• 50 MW at a single site, connected above 69 kV: FERC's preliminary definition of a large load in the orders (Vinson and Elkins). SPP uses a narrower definition.
• 60 to 90 days: the initial study time contemplated in the orders (Vinson and Elkins).
• 60 days: the study time on which DOE sought comment for large loads that agree to be curtailable (DOE letter).
• 100 percent: the share of network upgrade costs DOE proposed large loads should bear, with comment sought on crediting (DOE letter).
• 17 August 2026: the date show cause responses were due, if no extension was granted (Husch Blackwell).
• 16 September 2026: the date comments and protests on those responses were due (Husch Blackwell; McGuireWoods, 22 June 2026).
• EL26-67 to EL26-72: the six dockets, one per grid operator (McGuireWoods, 22 June 2026).

Why federal rules for loads at all

The US grid is regulated in two layers. The Federal Energy Regulatory Commission, or FERC, regulates interstate transmission and wholesale power sales. State utility commissions regulate what customers pay for retail service and decide where power plants are sited. Texas is mostly outside FERC's reach because its grid is not connected across state lines in the same way.

A power plant connecting to the grid has long followed a standard FERC process. A customer connecting a big factory or data center followed whatever its utility or state required. That worked when large loads were rare. The Energy Secretary's letter says demand growth is now higher than at any point in the past two decades, citing the North American Electric Reliability Corporation, and that data centers are connecting rapidly to the transmission system. Utilities began facing requests for hundreds of megawatts from many developers at once.

How this differs from connecting a power plant

The generator side already has a detailed federal rulebook. FERC's Order No. 2023, issued on 27 July 2023 according to a fact sheet by the American Council on Renewable Energy (ACORE), an industry group, rewrote the standard procedures that transmission providers use to connect new generators. The Federal Register version, published on 6 September 2023 under docket RM22-14-000, states that the rule took effect on 6 November 2023.

ACORE summarizes the main changes: a move from serial first come, first served studies to a "first-ready, first-served" cluster process, commercial readiness deposits that rise as a project advances, withdrawal penalties that also rise, and penalties on transmission providers that miss study deadlines, ranging from $1,000 to $2,500 per day depending on the type of study. The aim was to clear out speculative requests and keep studies moving.

Much of the large load debate borrows that toolkit. DOE's letter explicitly proposes deposits, readiness tests and withdrawal penalties for loads like those generators face, and FERC's 2026 orders ask for application fees, study deposits and readiness requirements. The generator experience is a useful guide to what that means in practice, and the companion explainer on the generation interconnection queue covers it.

Step one: the DOE proposal of October 2025

On 23 October 2025 Energy Secretary Chris Wright used Section 403 of the Department of Energy Organization Act to send FERC an advance notice of proposed rulemaking. That is an early stage document that asks for public comment before any binding rule is drafted. DOE asked FERC to take final action no later than 30 April 2026. FERC opened docket RM26-4-000.

The attached proposal listed fourteen principles. In plain terms, the main ones were:

• Federal jurisdiction would cover loads that connect directly to the transmission system, not local distribution lines.
• The rules would apply to new loads above 20 MW, and the proposal invited comment on other thresholds, including whether one is needed at all.
• Loads should be studied together with generators where practical, because putting a load near a new plant can reduce the upgrades needed.
• Loads would face the same kind of study deposits, readiness tests and withdrawal penalties that generators face, to discourage speculative requests.
• Hybrid facilities, meaning a load and a generator sharing one connection point, would be studied by the amount of power they inject or withdraw. DOE's example was a 500 MW load with a 600 MW generator that might seek no withdrawal rights and 100 MW of injection rights.
• Hybrid connections would need protection equipment that stops injections or withdrawals above the agreed rights.
• Loads that agree to be curtailable, meaning the grid operator can reduce or cut their power, would get an expedited study. DOE asked whether such studies could be done in 60 days.
• Loads would be responsible for 100 percent of the network upgrades assigned to them, with comment sought on a crediting mechanism that might return part of the cost over time.
• An existing power plant that wants to partly shut down to serve a new load at the same site would go through a reliability study first.
• Utilities serving large loads would still have to meet all North American Electric Reliability Corporation standards.

The letter also stated that the proposal was not meant to discourage utilities from filing their own fixes with FERC under section 205 of the Federal Power Act.

Federal jurisdiction over load connections is a legal question, because states regulate retail electricity. The DOE letter argues FERC has jurisdiction when a load connects directly to interstate transmission, and says the proposal does not touch retail sales or the siting of power plants. Comments filed against the proposal are part of the public docket and are not summarized here.

Step two: FERC's April 2026 signal

In an order of 16 April 2026, FERC said it would act in RM26-4-000 by the end of June 2026. According to a summary by Troutman Pepper Locke, FERC said it wanted a framework that is "quick, efficient, and legally durable" and that it had reviewed more than 3,500 pages of comments. The same summary lists steps FERC had already taken: it directed PJM to adopt transparent rules for large loads co-located with generation, approved SPP's High Impact Large Load proposals, and acted on several utility large load tariffs, accepting many and rejecting some.

Step three: six show cause orders in June 2026

FERC did not issue a single national rule. On 18 June 2026 it issued six orders under section 206 of the Federal Power Act, one for each of PJM, MISO, SPP, CAISO, ISO New England and NYISO, with their transmission owners. A show cause order is a regulator saying, in effect, that your rules look inadequate and you must explain why they are not, or fix them.

McGuireWoods, in an alert of 22 June 2026, lists the dockets: PJM in EL26-67-000, SPP in EL26-68-000, NYISO in EL26-69-000, MISO in EL26-70-000, CAISO in EL26-71-000 and ISO New England in EL26-72-000. The same alert says the substance of the six orders is largely identical, with language tailored to each region's existing processes, and that FERC said it was not seeking a "one-size-fits-all" solution. Chairman Swett wrote in a concurrence that the show cause route would let FERC "spearhead lasting reform much more expeditiously" than a single national rule.

Two protections matter for projects already in negotiation. According to McGuireWoods, the orders do not disrupt existing agreements that large loads have negotiated or are negotiating for transmission service, and any tariff changes should give reasonable time to finish commercial agreements that are close to done. The refund effective date, the earliest date from which any rate change could apply, is the date the orders are published in the Federal Register.

Per the Troutman summary, FERC preliminarily found the tariffs may be unjust, unreasonable or unduly discriminatory because they lack sufficiently clear and consistent provisions for integrating large and co-located loads. Per Vinson and Elkins, the six regions together serve nearly two thirds of FERC jurisdictional load.

Law firm summaries differ on how many topic areas the orders cover. Troutman lists four tariff areas, which are flexible large loads, co-location arrangements, load with behind the meter generation, and generating facilities with electrically proximate or co-located large load, plus a separate resource adequacy report. Husch Blackwell describes five reform areas. The count differs because firms group the subjects differently, so check the orders if the exact list matters to you.

Here is what the orders ask for, according to Vinson and Elkins.

Definition. A preliminary large load is a new commercial or industrial customer at a single site with a peak load of 50 MW or more, connected above 69 kV, and not part of a co-location arrangement. SPP's definition is narrower. Compute Law Blog, summarizing an SPP filing, says SPP's High Impact Large Load is 50 MW or more above 69 kV, or 10 MW or more at or below 69 kV.

Study process. Rolling acceptance of applications instead of fixed clusters. Application fees and study deposits to deter speculative requests. Readiness requirements such as site control and financial commitment. Studies covering thermal, voltage, stability, short circuit and deliverability issues. Initial results in 60 to 90 days. Consideration of options such as advanced conductors, grid enhancing technologies and storage used as transmission.

Costs. Disclosure of aggregate load additions by region and year, and of network upgrades by type with cost estimates. A standard cost recovery agreement with a minimum financial contribution toward the upgrades attributable to the load, credit support such as a letter of credit, a bond or cash, and a mechanism that credits the amounts paid back over time.

Flexible loads. Interim network service and firm or non firm contract demand services for loads that can be controlled, using automated demand response, real time telemetry and communication protocols.

Co-location. Questions such as whether a co-located load smaller than its generator's output must take transmission service, and whether demand charges should be set on a gross or a net basis. PJM is handled in a separate proceeding.

Electrically proximate loads. A load within two substations of a generator's connection point would get one of several possible treatments, such as a dedicated study process with interim service. McGuireWoods quotes the orders' footnote definition: a load close enough to the generator's point of interconnection that its effect on the transmission system is effectively the same as if both sat at the same substation.

The deadlines

Husch Blackwell and McGuireWoods give the same dates, all counted from 18 June 2026. Vinson and Elkins's own calculation differs by a day or two on some of them, so the dates below follow the first two firms:

• 9 July 2026: motions to intervene.
• 20 July 2026: each operator's informational report on generation adequacy.
• 3 August 2026: last day to request a pause of up to 90 days to prepare tariff filings under section 205.
• 17 August 2026: show cause responses, or proposed tariff changes, assuming no extension.
• 16 September 2026: comments and protests on those responses.

A consolidated account of what each region filed in August 2026, or of any FERC ruling since, had not appeared in the sources cited here as of 19 October 2026. Anyone relying on this should read the dockets, numbered EL26-67 through EL26-72.

The rulemaking itself did not end. McGuireWoods reports that docket RM26-4-000 remains open, that parties may keep filing comments there, and that FERC did not rule out future nationwide action covering every transmission provider, including those outside the six regional markets.

What this means in practice

For a developer, the direction is toward a clear, written process with fees, deposits and readiness tests, in place of a negotiation with a utility. That cuts down on duplicate requests, which was a stated aim.

It also moves cost risk onto the developer. Under DOE's principles and FERC's cost recovery agreement concept, the load pays for upgrades it causes, with credit support up front. That ties closely to state level tariffs described in the companion explainer on what a data center needs to get connected.

And it makes flexibility valuable. Both the DOE letter and the orders offer faster or interim service to loads that accept limits. The companion post on curtailment and flexible load covers that.

Co-location is a big piece. Compute Law Blog says FERC ordered PJM on 18 December 2025 to create four transmission service options for co-located loads, and that SPP's conditional service, called CHILLS, gives seven years of non firm transmission, per a FERC order dated 5 June 2026. Both points are the blog's account, and the FERC orders are the primary record. Separately, McGuireWoods notes that on 18 June 2026 FERC also issued an order on PJM's compliance work that accepted some of its proposed large load tariff revisions and directed further changes on others.

What is firm and what is uncertain

Firm, from the DOE letter and several law firm summaries that agree:

• DOE proposed federal rules on 23 October 2025 with a 20 MW threshold and asked for final action by 30 April 2026.
• FERC issued six section 206 show cause orders on 18 June 2026.
• The orders preliminarily describe a large load at 50 MW or more at one site above 69 kV, and SPP's definition differs.
• Response deadlines ran from July to September 2026.
• The RM26-4-000 rulemaking docket remains open, per McGuireWoods.

Uncertain:

• Whether FERC will issue a binding nationwide rule or rely on region by region tariffs.
• Whether FERC's jurisdiction over load connections will survive legal challenge.
• What the regions filed in August 2026 and how FERC rules on them.
• Where the final threshold lands, given 20 MW in DOE's proposal and 50 MW in the orders.
• How utilities outside the six regional markets will act. McGuireWoods reports that Chairman Swett, Commissioner LaCerte and FERC staff strongly recommended that those transmission providers consider their own filings under section 205, but the orders do not bind them.

What to watch next

• FERC orders in dockets EL26-67 to EL26-72 after the September 2026 comment round.
• Any move from the advance notice in RM26-4-000 to a formal proposed rule.
• Court challenges on jurisdiction, and state commission responses.
• How the rules treat hybrid facilities, since that decides whether on site generation shortens the wait.
• Whether flexible service becomes a standard offering with a fixed timeline.

Safeguard's SBOM and dependency scanning covers the software side of infrastructure projects, and the free scan is at https://gold.safeguard.sh/scan.

Quick check

Sources

• US Department of Energy, Secretary of Energy letter and advance notice of proposed rulemaking, 23 October 2025: https://www.energy.gov/sites/default/files/2025-10/403%20Large%20Loads%20Letter.pdf
• Troutman Pepper Locke, "FERC Commits to June 2026 Action in Large Load Interconnection Rulemaking," April 2026: https://www.troutmanenergyreport.com/2026/04/ferc-commits-to-june-2026-action-in-large-load-interconnection-rulemaking/
• Troutman Pepper Locke, "FERC orders regional grid operators to justify or reform tariff provisions for interconnection of large loads," July 2026: https://www.troutmanenergyreport.com/2026/07/ferc-orders-regional-grid-operators-to-justify-or-reform-tariff-provisions-for-interconnection-of-large-loads/
• Vinson and Elkins, "FERC institutes six simultaneous section 206 proceedings targeting large load interconnection": https://www.velaw.com/insights/ferc-institutes-six-simultaneous-section-206-proceedings-targeting-large-load-interconnection-across-all-rto-iso-markets/
• Husch Blackwell, "FERC issues show cause orders to all six RTOs/ISOs on large load interconnection": https://www.huschblackwell.com/newsandinsights/ferc-issues-show-cause-orders-to-all-six-rtos/isos-on-large-load-interconnection
• Van Ness Feldman, "FERC acts on large load integration": https://www.vnf.com/ferc-acts-on-large-load-integration-key-issues-addressed
• McGuireWoods, "FERC issues section 206 show cause orders directing all six RTOs/ISOs to justify or reform large load integration rules," 22 June 2026: https://www.mcguirewoods.com/client-resources/alerts/2026/6/ferc-issues-section-206-show-cause-orders-directing-all-six-rtos-isos-to-justify-or-reform-large-load-integration-rules/
• Federal Register, FERC Order No. 2023, Improvements to Generator Interconnection Procedures and Agreements, 6 September 2023: https://www.govinfo.gov/content/pkg/FR-2023-09-06/html/2023-16628.htm
• ACORE, fact sheet on FERC Order 2023, September 2023: https://acore.org/wp-content/uploads/2023/09/ACORE-Fact-Sheet-FERC-Order-2023.pdf
• Compute Law Blog, "How AI data centers connect to the grid": https://computelaw.blog/power/how-ai-data-centers-connect-to-the-grid-ferc-power-queue/
• Texas Legislature, Senate Bill 6 (89th Legislature) enrolled text: https://capitol.texas.gov/tlodocs/89R/billtext/html/SB00006F.htm

Last reviewed: 19 October 2026.