FERC Orders Six Grid Operators to Fix Data-Centre Connection Rules
· TexaHub · Regulation & Ethics, AI in Industry, Risks & Opportunities
FERC's 18 June show cause orders give PJM, MISO and four other grid operators 60 days to justify or reform how they connect data centres.
What FERC did
On 18 June the Federal Energy Regulatory Commission issued six show cause orders under section 206 of the Federal Power Act, one each to PJM, MISO, SPP, CAISO, ISO-NE and NYISO, requiring them to justify their existing tariffs for connecting large loads such as AI data centres and factories, or to propose revisions [2]. The orders cover five areas: application and study processes for large-load transmission service, cost transparency and protection against cost shifting, co-location arrangements, transmission services for flexible loads and behind-the-meter generation, and terms for generators serving electrically proximate large loads [2].
The timetable is short. Interventions are due by 9 July, informational reports on resource adequacy by 20 July, requests for a 90-day abeyance by 3 August and the operators' show cause answers by 17 August, with stakeholder comments due by 16 September [2]. FERC also accepted parts of PJM's proposed large-load tariff revisions and directed further compliance on others [2].
Why regional orders
The orders respond to a request that Energy Secretary Chris Wright sent FERC on 23 October 2025 asking it to consider action on large loads, which the American Action Forum notes cited a threshold of 20 megawatts [1]. FERC chose tailored regional orders rather than a nationwide rulemaking; the Forum argues this was meant to make the action more legally durable against challenges from state-level stakeholders [1]. FERC left its existing rulemaking docket, RM26-4-000, open and did not rule out later nationwide action [2]. Chairman Swett wrote in a concurrence that the show cause route lets the commission "spearhead lasting reform much more expeditiously" [2].
Holland & Knight's summary notes that stakeholders get 30 days to respond once the operators have filed, and that PJM faces a separate 60-day compliance deadline [3]. The Forum puts the status quo at "at least 5 years" for users of 200 MW or more to be connected after submitting an interconnection request [1].
What to watch
Cost allocation is where the politics sit. In March, Amazon, Google, Meta, Microsoft, OpenAI, Oracle and xAI signed a White House Ratepayer Protection Pledge to pay for grid upgrades and new generation serving their data centres, but POWER Magazine noted that the pledge has no binding enforcement mechanism [4]. The same report cited PJM capacity prices rising 833% between the 2024-25 and 2025-26 delivery years [4].
The FERC orders could turn voluntary pledges of that kind into tariff obligations, though that is our reading rather than anything the commission has decided. The resource adequacy reports due on 20 July will be the first indication of how each operator expects to find generation for data-centre load, and the 17 August answers will show whether the operators defend their current rules or concede reform is needed.
Sources
[1] FERC Data Center Orders Accelerate Grid Connection — American Action Forum, 18 Jun 2026
[2] FERC Issues Section 206 Show Cause Orders Directing All Six RTOs/ISOs to Justify or Reform Large Load Integration Rules — McGuireWoods, 22 Jun 2026
[3] FERC Advances New Oversight Framework for Large Loads and Co-Located Generation — Holland & Knight, 23 Jun 2026
[4] Hyperscalers Sign White House Pledge to Fund Data Center Power, Grid Upgrades — POWER Magazine, 5 Mar 2026