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In late October 2025, at the direction of the Secretary of the US Department of Energy ("DOE"), the Federal Energy Regulatory Commission ("FERC" or the "Commission") opened a preliminary rulemaking proceeding with the potential to result in significant changes to how data centers, advanced manufacturing facilities, and other energy-intensive projects are interconnected to the US bulk electric transmission grid.
Background
On October 23, the Secretary of the DOE issued a directive (the "Directive") under Section 403 of the Department of Energy Organization Act (the "Act")1 to FERC to assert jurisdiction over the interconnection of large electrical loads to the US bulk electric transmission system and establish standardized interconnection procedures for such loads. The Directive attached an Advance Notice of Proposed Rulemaking ("ANOPR") entitled Ensuring the Timely and Orderly Interconnection of Large Loads, which outlines the need for large-load2 interconnection reform due to the unprecedented growth in electricity demand from data centers, advanced manufacturing, and large-scale electrification projects. The ANOPR also identifies a legal framework for FERC's assertion of jurisdiction over large load interconnections and provides a series of guiding principles to facilitate standardized large load interconnection rules. The Secretary set a deadline of April 30, 2026 for FERC's final action on the ANOPR.
In response, on October 27, FERC issued a Notice Inviting Comments on the ANOPR.3 On November 7, in response to numerous requests for an extension of time, FERC set an initial comment deadline of November 21 and a reply comment deadline of December 5.4
Current Regulatory Framework and Basis for FERC's Jurisdiction
While FERC has long had a standardized generator interconnection process for utility-scale assets larger than 20 megawatts, historically, the agency has not asserted jurisdiction over the interconnection of electrical loads receiving energy from the grid. Instead, state public utility commissions have exercised regulatory authority over the interconnection of load across the United States. The lack of a uniform federal standard has led to an inconsistent patchwork of interconnection processes that are often prolonged and opaque, frustrating project developers and delaying development timelines.
To ensure the timely and orderly interconnection of large-load projects across the US bulk power system, the ANOPRidentifies several legal justifications for the Commission's jurisdiction over large load interconnections. Under Section 201(b) of the Federal Power Act ("FPA"), FERC has authority to regulate the transmission of electric energy in interstate commerce and the sale of electric energy at wholesale in interstate commerce.5 The ANOPR asserts that the interconnection of large loads to the interstate transmission system is a natural outgrowth of the Commission's FPA jurisdiction, because, like generator interconnections, the interconnection of large load (1) is a critical component of open, non-discriminatory access to the interstate transmission grid, and (2) directly affects wholesale electric rates. In defense of FERC's assertion of jurisdiction, the ANOPR argues that any large-load interconnection rules would not interfere with states' traditional regulatory authority over retail electric sales to large loads or the siting of generation facilities, both of which are largely carved out from FERC's FPA jurisdiction.6
Key Proposed Rulemaking Principles
The ANOPR provides a broad set of reform principles to guide FERC's rulemaking. In substance, the ANOPR's proposed framework would establish generator-like standardization for large load interconnections while facilitating the integration of new large load co-located with new or existing generation facilities, and potentially expediting the interconnection process for projects that agree to curtail and/or dispatch, as applicable.
Key elements of the ANOPR framework include:7
- Scope and Standardization of Large Load Interconnection:Consistent with FERC's existing generator interconnection framework, the ANOPR proposes limiting application of the reforms to loads greater than 20 megawatts that are interconnecting directly to FERC-jurisdictional transmission facilities. Likewise, the ANOPR directs standardized study deposits, readiness requirements, and withdrawal penalties to deter speculative load interconnection requests and improve demand forecasts. The proposal would also extend to interconnection customers an option-to-build interconnection facilities and certain network upgrades, as is currently provided to generator interconnection customers. The ANOPR seeks comment from industry participants on whether the 20-megawatt threshold is appropriate or should be eliminated entirely, and the extent to which existing generator interconnection study procedures (e.g., study deposits, readiness requirements, and withdrawal penalties) can be adopted for large load interconnections or whether additional commitments or financial penalties are appropriate.
- Hybrid Facilities and Study Integration: Notably, the ANOPR captures so-called "hybrid facilities" in which new load seeks to interconnect with the transmission system at or near the same point of interconnection as a new or existing generating facility. The ANOPR asserts that hybrid projects should be studied based on the specific net injection and/or withdrawal rights they request, with mandatory protection systems to prevent unauthorized injections or withdrawals that exceed the respective rights. To facilitate hybrid projects, the ANOPR proposes a joint study process in which new large load is studied together with new or existing co-located generating facilities where practicable in order to optimize siting and to potentially reduce the need for costly network upgrades. With respect to new large load co-locating with an existing generator, the ANOPR proposes that the generator should be required to complete a system support resource ("SSR")/reliability must run ("RMR") study to account for the megawatts proposed to be redirected to on-site load and to fund any necessary upgrades identified in the SSR/RMR study. The ANOPR requests comment on the minimum technical requirements for hybrid projects' system protection facilities, whether hybrid interconnection customers should be subject to penalties for unauthorized injections or withdrawals, and how such penalties should be designed, including allocation to other transmission customers. The ANOPR also requests comment on the extent to which resource adequacy considerations should be incorporated into the SSR/RMR study.
- Resource Flexibility: Under the ANOPR framework, large loads that agree to be curtailable and hybrid facilities that agree to be dispatchable would qualify for an expedited interconnection process, potentially as short as 60 days. The ANOPR seeks comment on whether the expedited interconnection process should be accomplished through a serial interconnection study mechanism, as well as the appropriate deadlines for the process, including whether the necessary studies could be completed in 60 days.
- Cost Responsibility: The ANOPR proposes that large load and hybrid facilities should be responsible for 100% of the network upgrades that they are assigned through the interconnection study process. The ANOPR seeks comment on whether network upgrade costs should be offset through a crediting mechanism and, if so, the appropriate amortization period.
Potential Implications and Next Steps
For data center developers, other large load projects, and their investors, the ANOPR proceeding represents a significant first step toward streamlining the often-slow and unclear large load interconnection process. The ANOPR's focus on establishing standardized interconnection rules and study procedures for large load could meaningfully reduce interconnection risk and cost uncertainty, which, in turn, would accelerate the development timeline for high-demand load projects. Similarly, the ANOPR framework directly addresses co-located projects and cost allocation, both of which have been the subject of lengthy FERC proceedings and regulatory uncertainty in recent years.8
At the same time, while the ANOPR provides a helpful framework for discussion, the specifics of any proposed load interconnection rules are likely to be the subject of significant litigation at FERC, including whether FERC's FPA jurisdiction extends to large load interconnections at all. Intervenors at FERC have already obtained an extension of the initial comment deadline from November 14 to November 21,9 and the ANOPR is only the first step in FERC's rulemaking process (followed by issuance of a formal Notice of Proposed Rulemaking). Given the current political environment and market demand for new large load projects across the United States, however, it seems likely that the newly seated Republican majority at FERC will act quickly to meet the Secretary's ambitious April 2026 deadline for final FERC action.
Footnotes
1. 42 U.S.C. § 7173.
2. The ANOPR preliminarily defines large loads as those greater than 20 megawatts.
3. See Interconnection of Large Loads to the Interstate Transmission System, Notice Inviting Comments, Docket No. RM26-4-000 (issued Oct. 27, 2025).
4. Interconnection of Large Loads to the Interstate Transmission System, Notice Granting Extension of Time, Docket No. RM26-4-000 (issued Nov. 7, 2025).
5. 16 U.S.C. § 824(b).
6. Id.
7. In addition, the ANOPR: (1) seeks comment on the appropriate transition plans to implement the proposed reforms, including the treatment of large load interconnections that are currently being studied for interconnection; (2) directs the North American Electric Reliability Corporation ("NERC") to review its reliability standards to determine if new registration categories or new or modified reliability standards should be required to ensure reliability of the bulk electric system; and (3) states that utilities serving large loads must meet all applicable NERC and transmission provider tariff requirements, including integrating any necessary revisions to implement the ANOPR's reforms.
8. See, e.g., PJM Interconnection, L.L.C., 190 FERC ¶ 61,115 (2025).
9. See, e.g., Interconnection of Large Loads to the Interstate Transmission System, Motion for Extension of Time of the Organization of MISO States, Inc., Docket No. RM26-4-000 (filed Nov. 4, 2025); Notice Granting Extension of Time, Docket No. RM26-4-000 (issued Nov. 7, 2025).
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