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FERC Pushes Six Grid Operators to Rewrite Large-Load Rules as PJM's Queue Swells to 220 GW
FERC's large-load directives set a 50 MW threshold and demand new tariffs from all six RTOs to stop data-center campuses from shifting grid-upgrade costs onto existing customers.
On Thursday (2026-07-16), Utility Dive set out how the Federal Energy Regulatory Commission wants large electricity loads reshaped, fixing its threshold at facilities above 50 MW that connect above 69 kV and sorting its demands into a handful of buckets. Those cover a genuine interconnection process for large loads, cost transparency so new arrivals do not push network-upgrade bills onto existing customers, clear rules for co-location and behind-the-meter generation, a new class of transmission service for loads that can flex, and a study process for generation built next to those loads.6
The reforms land on a market straining under data-center demand. On June 18 (2026-06-18) FERC voted unanimously to issue tailored show-cause orders under Section 206 of the Federal Power Act to each of the six regional transmission organizations it oversees, directing them to justify or rewrite their large-load tariffs. Staff said the orders address a pressing need across the RTO and ISO regions and touch 200 million Americans in more than 30 states and Washington, covering close to two-thirds of the electricity load under the commission's jurisdiction.4
For traders, cost allocation is the mechanism that will move numbers. FERC's push for transparency is aimed squarely at the risk that a gigawatt-scale campus connects, triggers major network upgrades, and leaves the bill smeared across ratepayers who never asked for it. How each RTO answers will shape where capacity and energy costs settle over the next several years.6
The scale is the reason. US data-center demand is projected to grow by at least 65 GW and as much as 90 GW by 2029, according to Grid Strategies.1 PJM's first reformed queue cycle alone drew 811 projects totaling 220 GW of proposed capacity.3
The interconnection backlog is not new. FERC directed all six major regional operators outside Texas to build large-load programs, and grid operators have since asked Washington for more time to upgrade the transmission they already run.1 The show-cause orders now push the other way, demanding faster, cleaner rules rather than extensions.
Co-location is the flashpoint. On June 4 (2026-06-04), Google unveiled a 1-GW-plus complex in the Texas Panhandle pairing a data center with its own generation, part of a strategy that has seen the company contract more than 22 GW of clean energy since 2010 and secure 1 GW of demand-response capacity under long-term utility contracts.3 FERC's new bucket for generation sited next to load is written for exactly these deals.
The flexible-load class carries the most market leverage. Writing on Wednesday (2026-07-15), former PJM board member Jeanine Johnson argued that the grid's fastest-growing resource is flexibility rather than new generation.5 A data center that can curtail during peak hours looks very different to a system operator than one that cannot, and FERC wants a tariff category that recognizes the difference.
Whether that flexibility materializes is another matter. In PJM territory, utilities have been slow to share the smart-meter data that demand-response aggregators need. At Chicago-area utility Commonwealth Edison, Voltus initially enrolled about 20,000 customers but managed to sign up only about 4% of them through the utility's own system, the company said.2 Flexible-load tariffs mean little if the data plumbing does not work.
The fuel mix underneath all this is gas-heavy. PJM drew about 47% of its generation from natural gas in July (2026-07), against 22% from nuclear and 21% from coal, EIA regional data show. More load connecting into a stack that leans on gas keeps NYMEX Henry Hub relevant to PJM power costs, even as the queue fills with solar and storage.
The near-term signal is not a price but a paper trail. Each RTO must now respond to its show-cause order, and PJM's answer on cost allocation and flexible-load service will determine how much of the coming demand lands on existing customers versus the campuses driving it. PJM's Western Hub traded around $72/MWh on Thursday (2026-07-16), with July day-ahead near $60/MWh; a wave of inflexible gigawatt loads on the current stack points those figures higher. What the operators file, and how hard FERC pushes back, is the next thing to price.4