DOE Invokes Rare Authority To Direct FERC To Accelerate Grid Access For Large Loads And Data Centers

Key Takeaways

• What is Happening? Citing rapid growth in large commercial and industrial electricity demand, the U.S. Department of Energy (DOE) directed the Federal Energy Regulatory Commission (FERC) to initiate rulemaking procedures to assert FERC's jurisdiction over the interconnection of large electrical loads (defined as loads greater than 20MW) to the interstate transmission system.
• Who is Impacted? The proposal would affect large commercial and industrial facilities seeking transmission access. Utilities, transmission providers, and large generators could also be affected by changes to the Open Access Transmission Tariff (OATT), cost responsibilities for network upgrades, and interconnection procedures.
• What Should I Do? Electricity users should monitor FERC's rulemaking and comment on the proposed rules, especially regarding issues such as cost allocation, hybrid generation-load facilities, and interconnection study processes.

Overview

DOE directed FERC to begin the rulemaking process to develop standardized procedures for the interconnection of large electrical loads. On October 23, 2025, Secretary Chris Wright, acting under Section 403 of the DOE Organization Act, issued a letter requesting FERC to consider an Advance Notice of Proposed Rulemaking (ANOPR). On October 28, FERC established a new docket (Docket No. RM26-4-000) to consider DOE's ANOPR and issued a "Notice Inviting Comments."

The ANOPR proposes reforms to ensure efficient, timely, and non-discriminatory interconnections for loads exceeding 20 MW, including hybrid facilities that share interconnection points with generation resources. This initiative responds to surging electricity demand from AI data centers and other energy-intensive industries and aligns with the Administration's broader goals to strengthen domestic manufacturing and AI infrastructure.

The proposal, however, has already drawn pushback. Former Republican FERC Chair Mark Christie, also a former member of the Virginia Corporation Commission, called the proposed rulemaking "an unprecedented expansion of federal control and intrusion on the states' historic retail regulatory authority."

Background

Historically, FERC's interconnection rules (for example, Orders 888, 2003, 845, and 2023) focused on generator interconnections and open access transmission service, leaving load interconnections largely under state jurisdiction. For example, in Order No. 888, FERC's landmark order establishing open access to the nation's transmission system, FERC declined to assert authority over the transmission element of bundled retail transactions, and the U.S. Supreme Court upheld that approach in New York v. FERC, 535 U.S. 1 (2002), agreeing with FERC that "the regulation of bundled retail transmissions 'raises numerous difficult jurisdictional issues' that did not need to be resolved in the present context.' " However, Justice Thomas, in a partial dissent joined by Justices Scalia and Kennedy, rejected this approach, concluding 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," and suggesting that it might be necessary to assert FERC's maximum jurisdiction to remedy undue discrimination against non-utility competitors in the wholesale energy markets.

DOE's directive represents a rare use of the DOE Organization Act Section 403 authority to propose a rule directly to FERC, although FERC is not required to adopt the rule. Through the ANOPR, DOE emphasizes that extending standardized procedures to large-load interconnections is consistent with the Federal Power Act (16 U.S.C. § 824), which grants FERC exclusive authority over interstate transmission and wholesale electricity sales. DOE's letter notes that large-load interconnections, like generator interconnections, are integral to ensuring open and non-discriminatory transmission service. Perhaps foreshadowing the controversy the proposed rule may engender, the ANOPR quotes Justice Thomas's dissent in New York v. FERC to support FERC's authority to adopt the proposal, although the ANOPR also states that the rule would extend only to direct interconnections with interstate transmission facilities.

The Proposed Rulemaking

The ANOPR seeks to promote efficient and timely access to transmission service for large electrical loads, highlighting AI data centers as a critical new class of facilities that require accelerated grid access. DOE reaffirms FERC's authority to regulate interstate transmission and reasserts that load interconnections directly connected to the transmission grid fall within the Commission's jurisdiction.

The proposal would apply to new loads exceeding 20 MW, including hybrid facilities that share a point of interconnection with new or existing generation resources. In contrast, DOE disclaims federal authority over behind-the-meter, intrastate, and smaller (less than 20 MW) interconnections. The proposal attempts to mollify concerns about FERC overreach by asserting that state jurisdiction over retail sales, local distribution, and generation siting would remain unaffected.

The ANOPR outlines fourteen principles to guide FERC's rulemaking process, with several key proposals including:

• Large-load and hybrid facility interconnection requests would be subject to uniform study deposits, readiness requirements, and withdrawal penalties, mirroring FERC's current process for generator interconnections;
• Directing FERC to study load and generation interconnections together to improve efficiency in siting and to minimize the need for costly network upgrades;
• Evaluating hybrid facilities based on requested injection and withdrawal rights, encouraging co-location, and more efficient use of transmission capacity;
• Prioritizing review for curtailable or dispatchable facilities, with expedited interconnection studies potentially completed within 60 days; and
• Making large-load interconnection customers fully responsible for network upgrade costs assigned through the study process, with possible partial cost offset through crediting mechanisms.

What's Next

According to FERC's Notice Inviting Comments, initial comments on the ANOPR are due November 14, 2025, and reply comments are due November 28, 2025. DOE has directed FERC to take final action by April 30, 2026.

Interested parties should anticipate and use the opportunity to comment on the jurisdictional scope, interconnection study process, and cost allocation framework outlined in the ANOPR. In particular, DOE seeks input on several issues central to data center developers and other large-load customers, including the 20 MW applicability threshold, the treatment of hybrid facilities, cost responsibility, and transmission plans regarding how the final rules should apply to projects already in existing interconnection queues.

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