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By letter dated October 23, 2025, Department of Energy ("DOE") Secretary Chris Wright ("the Secretary") directs the Federal Energy Regulatory Commission ("FERC") to act to accelerate the interconnection of large retail loads, such as data centers. This direction comes at a time when there are reliability concerns, a continued focus on generator interconnection, and relatively new concerns regarding possible delays in the interconnection of large loads. On October 27, 2025, FERC issued a Notice Inviting Comments on the DOE proposal, with initial comments due by November 14, 2025 and reply comments due by November 28, 2025. 1 FERC action consistent with the DOE's direction could mark a significant—and, to many, concerning—departure from FERC's historic jurisdictional boundaries. FERC oversight of the interconnection of retail load would mark a fundamental change to how FERC has exercised its jurisdiction and could be viewed by certain states and transmission providers as an intrusion into state authority over retail regulation.
The letter directs FERC to initiate a rulemaking proceeding proposing the exercise of FERC's jurisdiction over the interconnection of loads larger than 20 MW to "rapidly accelerate" their addition to the grid. 2 Specifically, the letter declares that in order " [t]o usher in a new era of American prosperity . . . large loads, including AI data centers, served by public utilities must be able to connect to the transmission system in a timely, orderly, and non-discriminatory manner." 3 The letter includes a draft Advance Notice of Proposed Rulemaking ("ANOPR") 4 pursuant to the Secretary's authority under Section 403(a) of the Department of Energy Organization Act ("DOE Act") and directs final FERC action no later than April 30, 2026. 5
Looking to FERC's earlier efforts to standardize transmission providers' interconnection service to generation facilities, a FERC role in standardizing large load interconnection could be seen by some as beneficial. Currently, large loads are interconnected based on requirements established by individual transmission providers, typically subject to state regulation. Load interconnection agreements, as a result, are non-standard. FERC's generator interconnection procedures and agreements are intended to promote transparency and standardization, which in turn is intended to facilitate generator interconnections throughout the United States. However, despite FERC's continued efforts, the generator interconnection process continues to be challenging for both generation developers and transmission providers. The ANOPR directs FERC to require transmission providers to consider the interconnection of load and generating facilities together, in part to optimize study time and costs of grid improvements.
Standardizing large load interconnection agreements and procedures could discourage speculation by data center developers, which potentially results in inaccurate load forecasts. For example, standardizing increases in early deposits by large load developers—which has recently been required by some transmission providers—may encourage developers to more quickly abandon projects that are not economically viable. In turn, this could promote more accurate load forecasts, which are crucial to maintain reliability.
As with generator interconnection upgrade costs, determining an equitable method of cost allocation for constructing needed grid upgrades to facilitate load interconnection is likely to be challenging, whether there is a standardized large load interconnection process or not.
Significantly, the DOE's proposal is limited to load interconnections with transmission—in other words, the proposed action would not extend to load interconnections with distribution systems, no matter the size of the load. Also, even if FERC takes the steps proposed by the DOE and some version of the rules in the ANOPR becomes effective, states will retain authority over the ultimate retail sale of electricity to the load and exert significant authority that way.
The Secretary Weighs in on Issues that Have Been Hotly Contested at FERC for Over a Year
For over a year, FERC's jurisdiction over (and policy regarding) the interconnection of co-located load to the transmission grid has been the subject of several contested FERC proceedings, with the following occurring in the fourth quarter of 2024:
- Technical Conference: FERC held a technical conference related to the co-location of large loads with generation or storage, specifically focused on data center load. 6
- Susquehanna Interconnection Agreement: FERC rejected a transmission interconnection agreement intended to facilitate behind-the-meter electricity sales to an Amazon data center co-located with a nuclear generation facility. In a highly contested proceeding, FERC rejected the proposed interconnection service agreement without providing much guidance to stakeholders on what terms governing the transmission interconnection of co-located load would be acceptable. FERC summarily concluded that the filing parties failed to demonstrate that the agreement's unique provisions were necessary to mitigate reliability concerns, novel legal issues, or other unique factors. 7
- PJM Litigation: Constellation Energy Generation filed a complaint against PJM Interconnection, LLC ("PJM") challenging PJM's tariff for its allegedly disparate treatment of co-located data centers. 8 FERC denied the complaint but initiated a broader review of co-location issues in the PJM market, consolidating several related proceedings in the process. 9 In addition to directing a review of the adequacy of PJM's existing co-location rules, FERC solicited comments on jurisdictional principles. Specifically, FERC asked whether an interconnection agreement to interconnect co-located load with the PJM transmission system is in interstate commerce, and thus whether it is within FERC's regulatory jurisdiction. 10
Accordingly, the issues raised by the Secretary's letter are not new to FERC. The letter does, however, take a direct position on the appropriate scope of FERC's jurisdiction—a position that assumes a more aggressive posture than FERC has been willing to take to date. If FERC were to move forward with the ANOPR and ultimately implement policies similar to those directed by the DOE, it is not certain whether the expanded scope of FERC's jurisdiction would withstand judicial review.
Jurisdictional Considerations
In the letter, the Secretary acknowledges that FERC has not, historically, exerted jurisdiction over load interconnections with transmission. 11 Nonetheless, the letter argues that the interconnection of large loads to access the "interstate transmission system . . . falls squarely within the Commission's jurisdiction." 12 The attached ANOPR cites to four legal justifications for establishing FERC jurisdiction in this way:
- Large load interconnections are similar to generator interconnections (addressed in FERC Order No. 2003) and thus are a "critical component of open access transmission service" 13 that require "minimum terms and conditions to ensure non-discriminatory transmission service." 14
- The interconnection of large loads to the transmission system directly affects wholesale electricity rates, which fall within FERC's jurisdiction to ensure just and reasonable rates. 15
- The ANOPR does not hinder States' authority because it does not assert jurisdiction over retail electricity sales and does not propose reforms to the siting, expansion, or modification of generation facilities. 16
- "The Commission has exclusive jurisdiction over the transmission of electric energy in interstate commerce, including the rates, terms, and conditions of transmission service, and all facilities for such transmission or sale of electric energy at wholesale in interstate commerce." 17
These arguments form the jurisdictional basis for the reforms proposed in the ANOPR.
Proposed Reforms
The ANOPR cites several drivers for the rulemaking, including demand growth driven by home and vehicle electrification, along with increasing large commercial and industrial loads such as data centers. 18 The ANOPR seeks to standardize load interconnection procedures and agreements for transmission providers to provide transmission interconnection service to large loads, defined as loads greater than 20 MW, and allows customers to file joint, co-located load and generation interconnection requests.
The Secretary included fourteen principles in the ANOPR to guide FERC's rulemaking process. The principles urge FERC to require the consideration of the interconnection of load and generating facilities together to optimize study time and costs of grid improvements, while expediting the process for additional power to come online. The principles also include guidance for studying co-located or hybrid facilities and ensuring reliability while reducing study time. For example, the ANOPR states that the study of any large load and/or hybrid facility that agrees to be curtailable should be expedited. 19 The Secretary clarifies that facilities should be responsible for the cost of any network upgrades they are assigned pursuant to the interconnection studies, but leaves open the possibility of costs being offset through a crediting mechanism. 20 As drafted, the ANOPR seeks comment on the fourteen proposed principles.
DOE Action Pursuant to Section 403(a) Does Not Guarantee Any Particular FERC Outcome
The DOE issued the ANOPR pursuant to Section 403(a) of the DOE Act, which authorizes the Secretary to propose rules, regulations, and statements of policy of general applicability that concern matters within FERC's jurisdiction. 21 Further, FERC is required to consider and take final action on any proposal made by the Secretary "in an expeditious manner in accordance with such reasonable time limits as may be set by the Secretary for the completion of action by the Commission on any such proposal." 22
In 2017, Rick Perry, Secretary of Energy during the first Trump administration, similarly invoked Section 403 and issued an ANOPR to FERC to consider establishing a grid reliability and resilience pricing plan ("2017 ANOPR"). 23 At the time, this was the first time Section 403 had been used since 1985. The 2017 ANOPR directed FERC to consider a rule requiring certain wholesale electricity markets to establish new rules and required FERC to take final action within 60 days. The 2017 ANOPR sought to address a perceived reduction in baseload generation, particularly coal and nuclear resources, and to recognize that wholesale markets were not adequately compensating these generators for the grid resiliency benefits they were providing.
FERC considered the 2017 ANOPR and promptly issued a Notice Inviting Comments on the proposed rule. Subsequently, FERC terminated the proceeding by finding that the Secretary's proposed rule did not meet the statutory requirements under the Federal Power Act ("FPA"). 24 FERC determined that there must be a showing that existing tariffs are unjust, unreasonable, unduly discriminatory, or preferential before FERC will consider a tariff reform. 25 FERC did initiate a new proceeding: "(1) to develop a common understanding among the Commission, industry, and others of what resilience of the bulk power system means and requires; (2) to understand how each RTO and ISO assesses resilience in its geographic footprint; and (3) to use this information to evaluate whether additional Commission action regarding resilience is appropriate at this time." 26 However, on February 18, 2021, FERC also terminated this subsequent proceeding, finding that "concerns about the resilience of the bulk power system are best addressed on a case-by-case and region-by-region basis." 27
In short, when DOE similarly invoked Section 403 back in 2017, it did not result in any meaningful changes to FERC rules or policies. While this does not guarantee the same result here, this does suggest that FERC has significant and independent latitude in acting on DOE direction undertaken pursuant to Section 403.
Next Steps
The letter and ANOPR were issued immediately before Laura Swett was named Chairman of FERC. Chairman Swett, who is now sworn in and in office, has not made any public statements on these issues but, as noted above, promptly issued a Notice Inviting Comments on the ANOPR. Commissioner David Rosner—the immediately preceding Chairman who remains at FERC as one of two Democratic Commissioners—has stated, however, that he is excited to work with the DOE on the proposal and that "getting large load interconnection right is a generational opportunity that's key to winning the AI race, reshoring American manufacturing, and keeping electricity reliable and affordable for everyone. There is broad bipartisan support for the Federal Energy Regulatory Commission taking action soon on these issues, and I appreciate the Secretary turning to FERC to do so." 28 Separately, Mark Christie—former Republican FERC Chairman who is no longer at FERC but publishes views from a new position—suggested that the proposal represents "an unprecedented expansion of federal control and intrusion on the states' historic retail regulatory authority" and expressed concerns about reliability and increased costs to consumers. This jurisdictional tension is at the heart of the pending DOE proposal. 29
Likely key to any outcome at FERC will be FERC's interpretation of the holding of New York v. FERC, cited in the ANOPR, in which the Supreme Court upheld FERC's authority to require open access transmission through FERC Order No. 888. 30 There, the Supreme Court upheld FERC's decision to exercise jurisdiction over only unbundled retail transmission sales while declining to assert jurisdiction over bundled retail sales. The Supreme Court acknowledged that unbundled retail transmission is interstate commerce and subject to FERC's jurisdiction, but supported FERC's decision not to assert jurisdiction over bundled retail transactions, thereby committing FERC's exercise of such jurisdiction to FERC's discretion. 31 The ANOPR references Justice Clarence Thomas's dissent, in which he disagreed with the majority's finding of FERC's discretion, stating that "[w]hile Congress understood that transmission is a necessary component of all energy sales, it granted FERC jurisdiction over all interstate transmission, without qualification." 32
Although FERC may have jurisdiction over a transmission owner's provision of interconnection service to large retail loads, FERC has historically been sensitive to encroaching on areas that have traditionally been a part of state retail ratemaking authority. While FERC retains ultimate decision-making authority as to its agenda and the contents of its orders, and could satisfy the requirements of Section 403(b) of the DOE Act without issuing a final order (as it did with the 2017 ANOPR), the Secretary has made his policy preferences clear and it will be up to FERC, led by Chairman Swett, to determine what actions it will take. Significantly, as of today, FERC has three Republican Commissioners and two Democratic Commissioners, with Commissioner Rosner likely being sympathetic to the Trump appointees' positions on promoting AI growth more generally based on his recent statements.
Footnotes
1. Interconnection of Large Loads to the Interstate Transmission System, Notice Inviting Comments, Docket No. RM26-4-000 (Oct. 27, 2025).
2. Secretary of Energy's Direction that the Federal Energy Regulatory Commission Initiate Rulemaking Procedures and Proposal Regarding the Interconnection of Large Loads Pursuant to the Secretary's Authority Under Section 403 of the Department of Energy Organization Act (Oct. 23, 2025) ("DOE Letter").
3. DOE Letter at 1.
4. Ensuring the Timely and Orderly Interconnection of Large Loads, DOE Letter at 3-16 ("ANOPR").
5. The Secretary also issued a separate and distinct letter and ANOPR to FERC on the same day proposing a change to FERC's hydroelectric permitting process. This proposed regulatory change clarifies that third party opposition is not a basis to deny an application for a preliminary hydroelectric permit.
6. See Commissioner-led Technical Conference Regarding Large Loads Co-Located at Generating Facilities, Fed. Energy Regul. Comm'n (Nov. 1, 2024)
7. PJM Interconnection, LLC, 189 FERC ¶ 61,078 (2024).
8. Constellation Energy Generation, LLC v. PJM Interconnection, LLC, Complaint Requesting Fast Track Processing of Constellation Energy Generation, LLC, Docket No. EL25-20-000 (filed Nov. 22, 2024).
9. See PJM Interconnection, LLC, 190 FERC ¶ 61,115 (2025).
10. See id.
11. DOE Letter at 1.
12. Id.
13. ANOPR at P 13 (citing Standardization of Generator Interconnection Agreements & Procs., Order No. 2003, 104 FERC ¶ 61,044 (2012)).
14. Id. at P 13.
15. Id. at P 14.
16. Id. at P 15.
17. Id. at P 16.
18. Id. at P 1.
19. See id. at P 24.
20. See Id. at P 25.
21. 42 U.S.C. § 7173(a).
22. 42 U.S.C. § 7173(b).
23. Grid Reliability and Resilience Pricing, Docket No. RM18-1-000 (Sept. 28, 2017).
24. Grid Reliability and Resilience Pricing, 162 FERC ¶ 61,012 (2018).
25. See id. at P 14.
26. Id. at P 18.
27. Grid Resilience in Regional Transmission Organizations and Independent System Operators, 174 FERC ¶ 61,111 (2021).
28. David Rosner, LinkedIn Post (Oct. 24, 2025).
29. Mark C. Christie, LinkedIn Post (Oct. 24, 2025).
30. New York v. Fed. Energy Regul. Comm'n, 535 U.S. 1 (2002).
31. Id. at 25-28.
32. Id. at 42 (Thomas, J., dissenting).
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