FERC Launches Region-Specific Reform Initiative for Large-Load Interconnection and Co-Location
On June 18, 2026, the Federal Energy Regulatory Commission (FERC or the Commission) issued six show cause orders directing each Regional Transmission Organization and Independent System Operator (RTO/ISO) under its jurisdiction to justify or revise its tariff provisions governing large-load interconnection and co-location arrangements. The orders represent the Commission’s most comprehensive effort to date to establish a regulatory framework for connecting data centers and other large loads while protecting grid reliability and existing customers from cost shifts.
FERC Charts a New Path for Large Load Co-Location in PJM
At the December 18 Open Meeting of the Federal Energy Regulatory Commission (“FERC”), FERC took action to provide guidance on how large loads and generators may co-locate in the PJM Interconnection, L.L.C. (“PJM”). FERC’s decision in the PJM large load co-location proceeding comes amid a national debate over how best to meet surging electricity demand—spurred in large part by the buildout of artificial intelligence and other digital infrastructure—and how to overcome regulatory roadblocks to building new grid infrastructure. FERC underscored its priority in this debate: “if a new large load wants to connect directly to a power plant and operate in a way that lowers grid costs, we should let it.”[1] The Order charts a new path for the co-location of large loads in PJM and sheds light on FERC’s potential next steps.