Commission orders all six regional grid operators to justify or reform tariffs for data centers and other large energy users, delivering speed-to-power that is critical to supporting the innovation economy and national security while protecting ratepayers.
Fact Sheet | Presentation | Items E-7, E-8, E-9, E-10, E-11, E-12
The Federal Energy Regulatory Commission (FERC) today issued tailored show cause orders under section 206 of the Federal Power Act to each of the six regional grid operators under its jurisdiction, directing them to justify or reform the rules that govern how data centers, manufacturing facilities, and other large energy users connect to the electric grid.
The orders mark one of the most significant actions the Commission has taken to modernize the nation's electric markets and push the economy into the future by speeding integration of large energy users onto the grid with additional rigorous consumer safeguards. By requiring Regional Transmission Organizations (RTOs)/Independent System Operators (ISOs) and their transmission operators to either defend or revise their tariffs, FERC is moving to ensure that Americans have reliable, affordable power—even as electricity demand and technology accelerates.
Today's orders advance the Secretary of Energy's Advance Notice of Proposed Rulemaking directives, delivering the speed to power that is critical to supporting the innovation economy, leading the global race on artificial intelligence, and reshoring manufacturing jobs back to the United States.
“We are setting the stage for a resilient, reliable, and forward-thinking grid that empowers communities and safeguards consumers by transforming the way large energy users access the grid. It also is critical that FERC provide certainty for investors by directing the markets to protect existing deals and unlock opportunities for technological advancement and economic expansion. We can facilitate both, which is exactly what we did today,” said FERC Chairman Laura V. Swett.
FERC's action focuses on the unique operational profiles of large energy users, including those co-located with their own generation, and on the distinct challenges each regional grid operator faces in meeting soaring demand from the proliferation of large loads. Because the six grid operators are unique in their individual advancement toward large load innovation and structure, market design, stakeholder composition and geography, the Commission's orders recognize that a one-size-fits-all solution is not the current most efficient solution for integrating large, energy-intensive loads onto the nation's electric grid.
Tailored Orders, Five Categories of Reform
Under the orders, each RTO/ISO, and its transmission owners have 60 days to either justify why their current tariffs remain just and reasonable without provisions tailored to large loads, or to file tariff changes that address the issues the Commission identified. Each tailored order tees up five categories of reform for the grid operators to address:
- Developing efficient transmission service application and study processes, including consideration of alternative transmission technologies
- Preventing cost shifting and requiring transparency into transmission costs
- Accommodating co-location agreements and behind-the-meter generation
- Providing new transmission services for flexible large loads
- Developing a process to study generating facilities that serve electrically proximate large loads and co-located loads
Additionally, within 30 days, each grid operator and its transmission owners must submit a detailed informational report describing how the grid operator intends to ensure that adequate generation will be available to serve existing and new large loads.
Building on a Track Record of Action
Today's orders build on a series of Commission actions over the past year to address large load growth, including a December 2025 order directing PJM to adopt transparent tariff rules for loads co-located with generation, and the Commission's approval of SPP's High Impact Large Load initiative establishing new study processes for large loads and electrically proximate generation. Commission staff reviewed more than 3,500 pages of public comments submitted in the large load interconnection docket and engaged extensively with stakeholders and federal partners, in developing today's action.
The Six Grid Operators
The RTOs and ISOs include PJM, Interconnection, LLC (PJM); Midcontinent Independent System Operator, Inc. (MISO); Southwest Power Pool, Inc. (SPP); California Independent System Operator Corporation (CAISO); ISO New England Inc. (ISO-NE); and New York Independent System Operator, Inc. (NYISO).
The Federal Energy Regulatory Commission regulates the interstate transmission of electricity, natural gas, and oil, and reviews proposals to build interstate natural gas pipelines, natural gas storage projects, and liquefied natural gas terminals, in addition to licensing hydropower projects. More information is available at www.ferc.gov.