FERC initiates Show Cause Order on large load interconnection reforms to modernize grid access for data centers and advanced manufacturing.
To accelerate the connection of large loads such as data centers to the electric grid, the Federal Energy Regulatory Commission (FERC) issued six show cause orders on June 18, 2026, directed at each Regional Transmission Organization and Independent System Operator (RTO/ISO) and their constituent transmission owners. The orders require these entities to justify why their planning and interconnection processes do not readily accommodate large load connections. This action followed an Advanced Notice of Proposed Rulemaking (ANOPR) that FERC issued in October 2025 at the direction of the U.S. Department of Energy. FERC limited its action to the footprint of organized markets operated by RTOs/ISOs.
Rather than issuing a Notice of Proposed Rulemaking (NOPR), FERC invoked Federal Power Act Section 206 authority, preliminarily finding that current RTO/ISO tariffs appear unjust and unreasonable because they inadequately address challenges posed by integrating large and co-located loads with the transmission system. Each RTO/ISO has 60 days to respond to briefing questions and 30 days to file an informational report on resource adequacy and how it will ensure adequate generation for existing and new large loads. FERC has indicated willingness to grant deadline extensions when regulated entities demonstrate good-faith compliance efforts.
By this approach, FERC expects reforms to be implemented faster than through traditional NOPR proceedings while accommodating regional differences among RTO/ISOs. The reforms target study processes and cost allocation to enable generation co-location with large loads. However, this flexibility creates risk of inconsistency among RTOs/ISOs regarding how large loads are defined, studied, and interconnected.
The impetus originated from a letter dated October 23, 2025, in which Department of Energy Secretary Chris Wright directed FERC to accelerate large retail load interconnections, particularly for data centers. On October 27, 2025, FERC invited comments on the DOE ANOPR, proposing standardized load interconnection procedures and allowing customers to file joint, co-located load and generation requests. The proceeding generated over 3,500 pages of comments and multiple stakeholder meetings, culminating in the June 18, 2026 show cause orders.
These issues are not novel. Over the past two years, RTOs/ISOs and stakeholders have filed various tariff revisions and pleadings addressing them. FERC's orders favorably cited recent RTO/ISO reforms—particularly those from PJM Interconnection and Southwest Power Pool (SPP)—as example frameworks respondents should consider.
Each RTO/ISO must respond to briefing questions explaining whether current procedures address outlined substantive issues. Those unable to demonstrate sufficient current procedures are expected to file Federal Power Act Section 205 tariff revisions, typically developed through multi-month stakeholder processes and subject to FERC comments and protests.
The timeline requires responses within 60 days and resource adequacy reports within 30 days. Interested parties may respond to RTO/ISO filings within 30 days of submission. RTO/ISOs and transmission owners may request abeyance within 45 days; FERC has historically granted extensions when utilities demonstrate good-faith effort.
For purposes of the show cause orders, FERC defines a large load as any load of 50 megawatts or more. This threshold reflects a balance: high enough to target data centers, advanced manufacturing, and energy-intensive processes, yet not so high as to exclude smaller and medium-sized projects currently under development. The ANOPR had proposed 20 MW; commenters suggested thresholds as high as 250 MW. This 50 MW definition aligns with SPP's recent large load tariff revisions.
A co-located load is defined as end-use customer load physically connected to an existing or planned generating facility on the customer's side of the transmission system point of interconnection. This definition tracks PJM's recent co-location tariff approach. However, each RTO/ISO may propose its own definitions provided they can demonstrate the definitions are just and reasonable. This flexibility risks inconsistency across RTOs/ISOs—including on fundamental questions like large load sizing—unless FERC enforces consistency when reviewing subsequent filings.
Each show cause order summarizes prior large load interconnection orders, particularly recent PJM and SPP reforms, reviews the relevant RTO/ISO's current tariff provisions, and identifies specific issues requiring response. Although tailored to each RTO/ISO, all five show cause orders address reforms across five broad categories.
The first category establishes large loads as a distinct classification, implements application and study procedures for transmission customers serving large loads that account for their unique operational and reliability challenges, and discourages speculative or duplicate service requests. Large loads typically exhibit higher energy intensity, geographic concentration, and different load profiles than traditional loads, requiring additional information during the application process to understand grid impacts. These reforms include pro forma provisions in transmission service agreements memorializing operational details such as equipment requirements, data requirements, and remote disconnect capability.
The second category focuses on transparency in network upgrade assignments and their costs for large load transmission service, establishing pro forma cost recovery agreements among the RTO/ISO, relevant transmission owners, and transmission customers.