FERC rejects ComEd's cancellation of PowerHouse Hillwood's data center power contract despite the facility being backed by only a $1 letter of credit.
The Federal Energy Regulatory Commission on September 22, 2026, rejected Commonwealth Edison's "notice of cancellation" of a transmission security agreement for a 1.8-gigawatt, $20 billion data center PowerHouse Hillwood Holding is developing in Joliet, Illinois.
The contract dispute centers on the transmission security agreement's credit support requirements. PowerHouse Hillwood contends it met the agreement's initial credit requirements via a $1 posting. The dispute is currently pending in U.S. District Court for the Northern District of Illinois.
In declining to assert primary jurisdiction over the interpretation of the ambiguous contract terms, FERC stated that the courts can resolve the matter as effectively as the federal agency. "Though we decline to assert primary jurisdiction over the interpretation of ambiguous contract terms involving credit support, our commitment to fair cost allocation, ratepayer protection, and regulatory clarity remains unwavering," FERC Chairman Laura Swett and Commissioner Lindsay See said in a joint concurrence.
Swett and See noted that the decision underscores the importance of reforms FERC proposed in June through show cause orders directed to regional transmission organizations and independent system operators. RTOs and ISOs have until mid-November to respond. Developing "clear and consistent" terms for connecting large loads to the transmission system is essential, the commissioners said. "It is also more important than ever that RTO/ISOs and their transmission owners may propose pro forma Cost Recovery Agreements," they stated. "And finally, it is more important than ever that any such agreements contain strong, consistent language that both protects customers from improper cost shifting and provides certainty to contracting parties."
FERC Commissioner David Rosner said the dispute illustrates why the agency directed RTOs and ISOs to develop pro forma cost-recovery agreements for large loads. "Requiring security deposits helps ensure both project viability and transparency," Rosner said. "Cost-recovery agreements matter because they enable efficient and accurate planning, and ensure that project risks stay where they belong: with the developer, not the public."
Commissioner David LaCerte criticized the $1 letter of credit posted by PowerHouse Hillwood. "The idea that $1 may provide appropriate security to any such agreement strikes me as an embarrassing legal fiction: insulting to the underlying ratepayers, stakeholders, and the grid itself that bear the real risk of this project," LaCerte said. "Treating that risk as collateralizable for less than the price of a cup of coffee to me trivializes the very obligations that such a guarantee purports to secure."