FERC Launches Rulemaking on Data Center Grid Interconnection
- Data Centers Grid Capacity Grid Connection & Reliability Regulatory
Marin Holt
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- 6 minutes read
- FERC ANOPR targets April 30, 2026 deadline for final rule on large load (>20 MW) interconnection
- NERC Level 2 Alert issued September 2025 citing grid disturbances from large load interconnection
- Data center growth expected to exceed 120% in several grid operator footprints by 2027
- PJM interconnection queues now exceed 5 years; AEP Ohio cut pipeline from 30 GW to 13 GW
- An estimated 90 GW of new data center load must connect to U.S. grid over the coming decade
The Federal Energy Regulatory Commission has initiated a landmark rulemaking proceeding to establish standardized rules for connecting large electrical loads to the interstate transmission system. The Advance Notice of Proposed Rulemaking (ANOPR), filed under Docket No. RM26-4-000, responds to an October 2025 directive from the Secretary of Energy and targets a final rule by April 30, 2026. The proceeding addresses loads exceeding 20 MW, a threshold that captures most data center facilities now seeking grid access.
Critical Perspective
FERC’s proposed rulemaking addresses over [100 GW](/?p=6521) of data center interconnection requests in the PJM queue, a figure comparable to the entire load growth of the early 20th century’s industrial electrification. Yet, this mirrors the rushed implementation of the Eastern Interconnection’s Reactive Power study in the early 2000s, which ultimately failed to account for the full scope of system impacts. We saw a similar scenario with the 2011 Eastern Interconnection Fault Current study, which required costly retrofits after its initial findings proved incomplete. Given the rapid pace of data center expansion and the inherent complexities of grid integration, how will FERC ensure this rulemaking doesn’t simply create a new set of compliance burdens without actually improving grid reliability for existing ratepayers?
What the Rulemaking Covers
The ANOPR clarifies that large load interconnection to the interstate transmission system falls within FERC jurisdiction, resolving a dispute pending for over a year. This represents a significant expansion of FERC authority, which previously regulated interconnection of generating facilities but not load-side connections. The proceeding seeks public comment on potential reforms to interconnection procedures, cost allocation, and technical requirements for facilities drawing more than 20 MW from the bulk power system.
Under the current framework, FERC uses a 100% participant funding model requiring large load customers to pay the full cost of grid network upgrades. The Edison Electric Institute has proposed a 100 MW minimum threshold for large load customers to avoid shifting upgrade costs to smaller ratepayers. Comments closed in December 2025, with FERC continuing to review input as of early 2026.
NERC Reliability Concerns
The rulemaking follows a September 2025 Level 2 Alert from the NERC Large Load Task Force, which identified grid disturbances, inadequate modeling, and insufficient technical interconnection requirements for large loads. NERC data shows data center growth in several grid operator footprints is expected to exceed 120% by 2027, with U.S. data center power demand already growing at 23% annually. A reliability guideline is forthcoming, with a potential Reliability Standard to follow in 2026.
Critical Analysis
FERC Docket RM26 interconnection rulemaking for data centers must address harmonic injection at the transmission PCC: IEEE 519-2022 Table 1 sets THDv limits of 5% at 1-69 kV PCCs and 2.5% at 69-161 kV transmission buses. FERC rulemaking responds to documented data center interconnection requests exceeding 100 GW in the PJM queue for the 2024-2025 study cycle, the largest single-sector load growth event since 20th century industrial electrification.
5-Year Projection
Within 5 years, these regulatory frameworks surrounding Grid Monitoring/SCADA Systems will strictly govern hardware procurement, rendering non-compliant legacy systems obsolete.
Why It Matters
PJM projects it will have just enough capacity to maintain reliability starting summer 2026, with potential shortfalls beginning June 2027. Interconnection queues now stretch beyond five years. AEP Ohio has already cut its data center pipeline from 30 GW to 13 GW after implementing new tariffs. The rulemaking will shape how an estimated 90 GW of new data center load connects to the grid over the coming decade, establishing cost allocation frameworks and technical standards that could serve as a national template.
