On June 18, the Federal Energy Regulatory Commission (FERC) ordered the country’s six largest U.S. regional grid operators to justify or revise rules governing how data centers, manufacturing plants and other large energy users connect to the electric transmission system, the agency’s latest move to address growing energy demand linked to artificial intelligence and industrial growth.
In a unanimous vote, the agency’s five commissioners voted to issue personalized “show-cause” orders to PJM Interconnection, Midcontinent Independent System Operator, Southwest Power Pool, California Independent System Operator, ISO New England and New York Independent System Operator.
The agency said the action is intended to speed up the integration of large loads while protecting existing customers from cost changes and reliability risks.
But the orders do not apply to the fast-growing data center in Texas, “which operates a network outside of federal jurisdiction,” according to E&E News.
FERC said each grid operator and its transmission owners must explain why existing rates remain fair and reasonable or propose revisions to address concerns identified by the commission.
The agency directed responses within 60 days and ordered grid operators to submit resource adequacy reports within 30 days, describing how they plan to ensure sufficient generation to meet existing and future heavy loads.
The commission identified five areas for potential reform: transmission service enforcement and study processes, including consideration of alternative transmission technologies; measures to avoid cost shifting and improve transparency; co-location and behind-the-meter generation agreements; new transmission services for large flexible loads; and study processes of generating facilities serving large electrically close loads.
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FERC noted efforts already underway by some regional grids to ramp up large loads, such as two Southwest Power Pool processes, to support new demand and overall reliability.
“We are setting the stage for a resilient, reliable and forward-looking grid that empowers communities and protects consumers by transforming the way large energy users access the grid,” FERC Chair Laura Swett said in a statement.
The action stems from a rulemaking effort launched after Energy Secretary Chris Wright ordered FERC in October 2025 to consider reforms aimed at ensuring the timely and orderly interconnection of large loads, including AI data centers.
Wright argued that the growing demand for electricity from AI and domestic manufacturing would require unprecedented investment in the nation’s transmission system and warrant federal action.
According to FERC, the growth in electricity demand is driven in large part by the rapid expansion of data centers and other large commercial and industrial loads. The commission’s filing accompanying the orders cites unprecedented demand growth and the challenges network operators face in accommodating high-load connections while allocating costs fairly.
FERC said the orders affect regions that serve about 200 million Americans in more than 30 states and the District of Columbia. The commission stressed that the action is tailored to individual regional markets rather than imposing a single framework at national level.
The orders do not assert federal jurisdiction over retail electricity rates, terms, or conditions, an issue that received significant attention during the rulemaking process. Instead, the commission focused on transmission-level rules governing the integration of large loads and related planning processes.
Rob Gramlich, president of market consultancy Grid Strategies, noted FERC’s orders are “at par” with the agency’s jurisdiction, stopping short of what Wright had proposed.
But Swett stressed that FERC is “under no illusion that major load problems are confined to RTO/ISO regions across the country, encouraging stakeholders elsewhere to report ‘barriers to entry,'” with the intention of encouraging, not limiting, new approaches, he said.
