FERC Chairman Swett pushes grid-enhancing technology incentives as data center load strains US transmission
Regulator weighs return-on-equity kickers and cost-recovery reforms to accelerate software-driven capacity gains on congested lines.
FERC Chairman Mark Swett said on Thursday (2026-07-23) the commission is exploring incentives for "grid-enhancing technology" that could extract more capacity from existing transmission infrastructure, a regulatory shift as the agency confronts a data-center power boom showing no sign of slowing.7
The six regional transmission operators and independent system operators under FERC's jurisdiction cover nearly two-thirds of US electricity load, serving around 200 million people across more than 30 states.4 PJM, the largest RTO, is under particular pressure. Commissioner David LaCerte called its stakeholder process something that has "continued to just grind into gridlock," speaking at a Philadelphia meeting on Wednesday (2026-07-09).5
Grid-enhancing technology has struggled to move from pilot to scale. OATI, a software firm working on dynamic line ratings and related tools, told Canary Media on Tuesday (2026-06-10) that it hopes to start delivering real-world capacity improvements by the third and fourth years of a joint project.3 In transmission terms, that timetable is fast.
Swett's approach sidesteps the harder fights over new-line permitting and cost allocation. The incentives he is weighing include an extra 0.5% return on equity for RTO members and "construction work in progress" recovery, which allows utilities to book project expenses during construction rather than waiting for rate cases to close.5 A 50-basis-point ROE addition is modest in isolation but meaningful for a sector where regulatory lag chronically depresses investment returns.
Sen. Mike Lee, R-Utah, said at the July 23 (2026-07-23) hearing that the competitive transmission push launched by FERC's Order 1000 "has not yet fully materialized."7 Swett's grid-enhancing technology push offers a faster route than large-scale network expansion, though whether incentives alone can unlock the deployment speed the grid needs is unresolved.
FERC's move on technology incentives sits alongside a broader regulatory push. On Thursday (2026-06-18), the commission voted unanimously to issue show-cause orders to all six RTOs and ISOs, directing them to justify or rewrite their large-load tariffs under Section 206 of the Federal Power Act.4 On Wednesday (2026-07-16), FERC ordered mandatory NERC reliability standards for data center and other computational loads.6 An initial draft of the Statement of Compliance Registry Criteria was posted for comment on April 1 (2026-04-01), and NERC expects to issue revised criteria for another stakeholder comment period in August.6
The technical standards will establish measurable reliability obligations; the registry criteria will determine which data center operators fall under formal oversight.6 For grid operators and investors, the key variable is scope: a narrow registry covering only hyperscale facilities leaves a different compliance burden than one drawn to capture mid-tier computational loads.
At the state level, two California bills introduced on Wednesday (2026-04-30) would require utilities to deploy grid-enhancing technologies to raise load factors, after data showed baseload demand declining relative to peaky loads such as EV charging and air conditioning.1 Similar dynamics have been eroding load factors in other states, analysts said.1
The Trump administration's "speed-to-power" directive for data centers has put FERC at the centre of competing timelines. Brad Simmons, speaking for Big Tech regulatory teams, told E&E News on Wednesday (2026-05-28) that FERC's approach has a "direct impact on our infrastructure build-out."2 Tech companies have hired energy and regulatory experts in-house and through outside counsel to engage with the commission, according to the report.2
FERC's order for mandatory NERC standards, issued on Wednesday (2026-07-16), creates a compliance clock that runs parallel to the technology incentive discussion.6 If the August (2026-08) comment period on revised registry criteria leads to a broad definition of covered computational loads, interconnection timelines for data centres could lengthen, keeping power-price volatility elevated across RTO footprints. The narrower the registry, the more manageable the near-term compliance picture for grid operators. How NERC draws that line is the next concrete signal to watch.6