CAISO Answers FERC With Two Flexible Interconnection Services and a 50 MW Large-Load Definition
- Data Centers FERC & Federal Policy & Markets Regulatory
Marin Holt
- 0
- 10 minutes read
- Large load threshold: 50 MW
- FERC filing due: November 16, 2026
- Abeyance granted: 90 days
- Comments due: September 2
- Voltage test dropped: 69 kV
CAISO published its Large Load Considerations straw proposal on August 12, 2026. It answers the FERC order to show cause in Docket EL26-71. The grid operator proposes two new flexible interconnection services for large loads. It would also define a Large Load as an end user at a single site with a peak load of 50 MW or greater. The stakeholder workshop on the document runs today, August 19.
Comments are due September 2, and the FERC filing is due November 16.
The headline of the proposal is what CAISO refuses to do. FERC found that CAISO’s tariff may be unjust and unreasonable because firm service is essentially the only transmission service on offer. It pointed to the PJM co-location order as a model. CAISO declines to create new transmission services at all.
Why It Matters
For two years, California data center developers have heard the same answer. Firm service is the only product, and network upgrades set the schedule. CAISO now offers a second path. It routes through interconnection service rather than transmission service, and that distinction decides who writes the rules and who can be sued over them.
CAISO argues the outcome is the same and the redesign cost is far lower. Its stated evidence is demand. The proposal reports that no stakeholder has yet asked CAISO to develop non-firm transmission services. Developers want firm service, it says, and will accept flexibility only as a bridge while long-lead upgrades finish.
FILI and FLIP
Flexible Interim Load Interconnection, or FILI, lets a large load connect at a curtailable level while crews build the network upgrades. The load converts to firm service once they finish.
CAISO says it will tailor each FILI to the point of interconnection and the constraints there. It declines to set any temporal or capacity cap on the service.
Flexible Load Interconnection Permanent, or FLIP, is the version with no exit. A load accepts flexible service in perpetuity. In exchange it never funds or waits for the network upgrades that firm service would require.
CAISO does not appear confident in the second one. The proposal asks stakeholders which services to prioritize. It goes further and asks whether options such as FLIP are worth pursuing at all right now. A grid operator inviting comment on dropping its own permanent offering is telling you where it expects the demand to be.
The definition drops two of FERC’s three tests
FERC suggested four tests for a large load. A new commercial or industrial customer, at a single site, with peak load of 50 MW or greater, interconnecting above 69 kV, and not part of a co-location arrangement. CAISO keeps the 50 MW threshold and the single-site test. It drops the rest.
The customer-type test goes because NERC is writing Computational Load standards. CAISO does not want two regulators defining the same load differently. It also does not want disputes over what counts as commercial or industrial.
The 69 kV test goes because the definition already names the CAISO controlled grid as the point of interconnection. That makes the load transmission-connected by construction. The co-location carve-out goes because CAISO sees no reason to say a co-located load is not a large load. Different tariff provisions will still apply to it.
CAISO also concedes its own definition may move. Writing the term into the tariff may be premature while NERC develops overlapping terms. The proposal says its definition may shift in the coming months to avoid regulatory conflicts.
Enforcement Reality
Nothing in this document binds anyone yet. This is a straw proposal in a stakeholder process. The enforceable step is the Federal Power Act section 205 filing CAISO expects to submit by November 16, 2026. FERC granted the abeyance that set that date and capped it at 90 days. It said it would look with great disfavor on any request to extend.
The harder limit is jurisdictional. CAISO is responsible for transmission planning, generator interconnection and system reliability. The participating transmission owners, not CAISO, own the tariffs that govern study, rates and cost recovery for serving new load. PG&E, Southern California Edison and San Diego Gas & Electric each have to write conforming provisions. Without that, none of this reaches a customer.
CAISO expects these proposals to keep evolving as the utilities do that work.
So a developer reading FILI as an available product today is reading too fast. The service does not exist until CAISO files it, FERC accepts it, and a transmission owner writes the matching provisions into its own tariff. The schedule runs through a draft final proposal on September 21. Comments close October 12, and the Board of Governors votes October 28.
Critical Perspective
FERC asked one question: is firm service the only transmission service CAISO offers, and is that just and reasonable. CAISO’s answer changes interconnection service instead. That may be the cheaper fix, and it may also read as non-responsive to the finding that opened the docket. FERC left itself the option of accepting an alternative framework, but it has not said this one qualifies.
The two-service headline may be a one-service reality. CAISO asks stakeholders whether FLIP is worth pursuing at all. A permanent flexible product is the harder and more consequential of the pair, because it is the one that lets a load skip network upgrades forever. Inviting comment on dropping it, in the same document that introduces it, is not the posture of an operator that expects to build it.
The definition carries the same hedge. CAISO proposes a 50 MW large-load definition and then says writing it into the tariff may be premature while NERC develops overlapping terms. A proceeding about how to treat large loads cannot settle much while the operator reserves the right to change what a large load is.
And the party that has to deliver any of it is not in the room. PG&E, Southern California Edison and San Diego Gas & Electric write the tariffs that price and study new load. CAISO can file FILI in November and still leave a developer waiting on three separate utility filings that have no deadline in this docket at all.
Sources
- CAISO, “Large Load Considerations: Straw Proposal,” August 12, 2026
- CAISO, “Motion for Abeyance,” Docket No. EL26-71-000, August 3, 2026
- CAISO, Large Loads stakeholder initiative page
- RTO Insider, “CAISO Issues Large Load Proposal to Address Show-cause Order,” August 13, 2026
- Utility Dive, “What data center developers need to know about FERC’s large load directives”
