The Federal Energy Regulatory Commission (FERC) issued directives on June 18, 2026, compelling six major U.S. regional transmission grid operators to address the growing backlog of data centers awaiting grid connection. These operators, collectively supplying most of the national electricity demand, have 30 days to report on how they ensure adequate power generation for existing and anticipated demand, and then 60 days to either justify their current connection rules and prices or propose changes. This initiative aims to speed up grid access for data centers, particularly those supporting AI, without increasing electricity costs for general consumers.
FERC's orders propose several reforms, including agreements for new large load customers to cover interconnection costs, preventing these costs from being passed on to other consumers. The commission also suggested developing efficient transmission service application processes and accommodating customers who provide their own power, often referred to as co-located or behind-the-meter generation. To combat speculative requests that burden grid operators with unnecessary studies, FERC recommends an "escalating readiness" approach, where data center builders receive more detailed planning information as they demonstrate greater financial commitment to a connection point. Additionally, the commission encourages combining impact studies for electrically proximate power plants and large load customers to expedite the process.
While welcomed by tech companies and data center developers eager for faster connections, the directives face scrutiny from some experts like Ari Peskoe of Harvard Law, who suggests the transparency around costs might be diluted in practice. The mandate follows an urging from U.S. Secretary of Energy Chris Wright to expedite grid connections for AI data centers, seen as crucial for the U.S. to compete in the fast-growing AI sector. FERC emphasized that the orders maintain states' authority over retail electric rates and conditions, and affirmed the value of new technologies like power-flexible data centers that can respond to grid needs.
Jeff Dennis of Coefficient Policy Experts noted that FERC's orders skillfully balance the need for expedited grid interconnection for large customers, especially data centers, with public concerns about potential electricity cost increases. If operators fail to satisfy FERC with their responses, the commission could initiate a slower, more formal rule-making process that typically spans two to five years and is prone to legal challenges. This current approach, however, allows for more flexible dialogue between grid operators and FERC.
Laura Swett, the commission chair, called the unanimous vote "historic," aiming to modernize the country's electricity market while safeguarding reliable service and shielding ratepayers. The commission identified five key areas for reform, requiring grid operators to prove their tariffs are "just and reasonable" in serving the burgeoning demand from large loads, including those of gigawatt scale. This move addresses the critical issue of data center construction outpacing new power plant development, which has led to tightened energy supplies in some areas and warnings of potential blackouts.
