Numerous energy industry groups and state regulators filed comments last week in response to a proposed rulemaking from the Federal Energy Regulatory Commission (FERC) that seeks to standardize procedures for interconnecting large electrical loads, particularly data centers and other energy-intensive facilities, directly to the transmission system.
Across responses, stakeholders like the Edison Electric Institute (EEI), Power for Tomorrow (PFT), and the Consumer Energy Alliance (CEA) broadly agreed on the need to address the rapid growth of large loads; avoid rushed or uniform federal mandates; ensure cost allocation protects other customers; and preserve reliability and resource adequacy.
For instance, EEI, which represents all investor-owned electric companies, recommended FERC ensure that large load customers pay for their share of system costs.
“Large load customers should be required to pay for their use of the transmission system rather than be directly assigned the costs of the network upgrades required to interconnect to the system,” according to EEI’s filing. “The commission should also endorse EEI members’ tested mechanisms to ensure that the costs of interconnecting large load customers do not burden other transmission customers in communities across our country.”
At the same time, EEI and other commenters also argued that FERC’s proposed jurisdictional expansion is premature, and that state regulators and utilities are already effectively managing the issue through local mechanisms.
“Facilitating expeditious interconnection of these new customers is an important goal, but the proposal raises key questions about FERC’s jurisdiction and, ultimately, could exacerbate the challenges of new large loads: speedy interconnection without expanding supply will strain reliability further and increase costs for all,” according to PFT’s filing. “FERC should be wary of proposals that could make conditions worse rather than better.”
FERC is doing what U.S. Energy Secretary Chris Wright told it to do when the secretary sent the commission an Oct. 23 letter with an attached Advanced Notice of Proposed Rulemaking (ANOPR), entitled “Ensuring the Timely and Orderly Interconnection of Large Loads.”
Wright proposed that FERC assert authority over loads exceeding 20 megawatts (MW), and noted that while historically the commission “has not exerted jurisdiction over load interconnections,” he thinks the issue of interconnecting large loads directly to the interstate transmission system “falls squarely within FERC’s jurisdiction,” and he told FERC to take final action “no later than April 30, 2026.”
On Oct. 27, the commission issued the proposed rulemaking, which had a Nov. 21 deadline to submit comments. EEI, PFT, and CEA joined hundreds of others in submitting comments, and specifically warned against such federal overreach.
EEI said its members are already working with state regulators and transmission operators to manage large load interconnections using “state-regulated large load tariffs and bilateral retail service agreements.”
“EEI members are also working with independent system operators (ISOs) and regional transmission organizations (RTOs) to address these challenges in parallel with state-level reforms,” according to EEI’s filing. “The right outcome of this proceeding is a sure-footed response by the commission that acts in concert with ongoing efforts by utilities, states, and ISO/RTOs.”
Additionally, EEI warned that “the commission should consider — and seek to avoid — potential jurisdictional stumbling blocks,” noting that service to large loads is currently regulated at the state level.
“Importantly, the commission can advance meaningful reforms without wading into the most sensitive jurisdictional issues,” said EEI.
Likewise, PFT called the issue “critical,” noting that the explosive growth in data center demand, coupled with the emergence of novel co-location arrangements that bypass traditional interconnection processes, presents legitimate challenges to grid planning and operations, and is one of the reasons for growing electricity costs for customers.
PFT also expressed concern that federal action could worsen grid stress, and urged FERC to recognize the vital state regulatory role in effectively managing and serving large loads, overseeing intrastate transmission, and determining cost allocation.
The organization also said FERC should “cautiously examine its jurisdictional authority” so as to remain within the bounds of the law and preserve states’ jurisdiction to continue to develop and deploy successful approaches to the large load challenge.
“Should the commission move forward with a rulemaking consistent with DOE’s proposal, it should ensure that any steps taken to facilitate large load interconnections are paired with efforts to protect reliability and minimize costs for customers,” according to PFT’s filing.
Similarly, the nonpartisan, nonprofit CEA warned against uniform federal rules and highlighted differences between market structures, noting that both market and regulatory structures vary from state-to-state and region-to-region with each having their own set of unique characteristics.
“Given the complexities and differences in these regulatory structures, FERC should avoid implementing rules that treat each jurisdiction the same,” CEA said, adding that “FERC should not preempt jurisdictions that are expeditiously connecting large loads.”
On another point, EEI proposed raising the definition of “large load” from 20 MW to at least 100 MW, and FERC also should make clear that “bundled retail service…is not at issue or under threat in this proceeding,” wrote EEI.
Echoing the DOE on cost allocation, CEA also noted that “growth pays for growth…costs should be borne by those who cause them.”
State regulators speak out
State utility commissions also were direct in their opposition.
The Washington Utilities and Transportation Commission (UTC), for example, wrote in its filing that state law gives Washington’s utility regulators direct oversight over retail rates.
“A federal interconnection process focused on transmission access may not maintain the essential role that the UTC (and other state commissions) play in ensuring fair retail electric rates that are free from cross subsidy,” wrote the UTC in its filing.
The UTC also warned that the proposed expedited timeline “does not afford the time necessary to get to the best answer,” and urged collaboration to maintain reliability and protect ratepayers.
“We encourage FERC to take the time to collaborate in developing a productive final rule that charts a path forward that facilitates large-load growth, preserves state jurisdiction, and protects all customers,” said the UTC.
Additionally, the Washington UTC said it supports a resolution adopted earlier this month by the National Association of Regulatory Utility Commissioners (NARUC), entitled “Resolution Urging the Federal Energy Regulatory Commission to Preserve and Affirm State Retail Regulatory Jurisdiction in its Large Load Interconnection Proceeding.”
The NARUC-adopted resolution identifies the importance of state-federal collaboration on issues relating to large-load interconnections, and the need to continue to respect the jurisdictional boundaries among local, state, and federal regulation.
“This is particularly true in Washington where large loads can interconnect to the transmission networks associated with state regulated utilities, FERC-jurisdictional utilities, and non-FERC jurisdictional utilities, including the Bonneville Power Administration,” wrote the UTC. “Ultimately, state and federal regulators and non-jurisdictional entities have an interest in developing lasting solutions to meet the growing demands on our energy systems, while keeping electricity affordable.”
The New York State Public Service Commission (PSC) agreed, saying it has “significant concerns” with the scope of the proposed ANOPR, which it said would intrude on matters reserved to the states under the Federal Power Act, namely service to end-use/retail customers.
The New York PSC also said it currently regulates such retail sales, including the interconnections necessary to serve retail customers. And while the significant number of requests to interconnect large loads, including AI centers, is a recent occurrence, the PSC said it already has the necessary procedures in place to make sure these interconnections do not compromise reliability or resource adequacy.
“The proposed ANOPR raises potential implications for the reliability of the electric system and the adequacy of generation resources by usurping state jurisdiction over these matters and presumably forcing the interconnection of large, end-use customers in order to usher in what the secretary describes as ‘a new era of American prosperity,’” the PSC wrote.
The New York PSC also criticized the accelerated timeline, and urged FERC to “pause the Proposed ANOPR rulemaking proceeding.”