Fact Sheet | FERC Takes Action to Supercharge America’s Grid for Efficiency, Reliability, and a Bold Energy Future

News Release | Infographic | Presentation | Items E-7, E-8, E-9, E-10, E-11, E-12

FERC today issues tailored show cause orders under Section 206 of the Federal Power Act to each of the six regional grid operators under its jurisdiction.  These groundbreaking proceedings represent historic action by the Commission to push our country’s electric markets and economy into the future by speeding the integration of large energy users, like data centers and manufacturing operations, onto the electric grid. These actions are designed to ensure that consumers nationwide continue to enjoy reliable, affordable power, as demand soars and technology leaps forward.

These orders also advance the goals of the Secretary of Energy’s advance notice of proposed rulemaking (ANOPR) to expedite the integration of large loads onto the transmission system, providing the speed to power that is critical to supporting the innovation economy, lead the global AI race, and reshore manufacturing jobs to the United States.

Key Details:

• The six U.S. regional grid operators and their transmission owners must provide justification within 60 days on why their current tariffs remain just and reasonable in the absence of clear and consistent provisions for large load customers—or alternatively to propose changes.  
• The orders respect the region-specific market rules that are already in place, anticipate differences in responses due to regional variability, and propose five categories of further reforms that grid operators should address:
  1. Developing efficient transmission service application and study processes, including consideration of alternative transmission technologies
  2. Preventing cost shifting and requiring transparency into transmission costs
  3. Accommodating co-location arrangements and behind the meter generation
  4. Providing new transmission services for flexible large loads
  5. Developing a process to study generating facilities serving electrically proximate large loads and large co-located loads

Importantly, nothing in today’s orders intrudes either on the authority of states to select, site, and permit generating resources or on the authority of state public utility commissions to set the rates, terms and conditions of retail sales of electricity.  The orders also make clear that the Commission acts today to guard against cost shifting among transmission customers but leaves to the states the responsibility to ensure that there is no cost shifting among retail customers.  

In addition, today’s orders are not intended to disrupt existing agreements that large loads have negotiated, or are in the process of negotiating, for the provision of transmission service. These orders provide that the RTOs/ISOs should allow a reasonable amount of time to finalize agreements that are nearing completion when any tariff revisions are filed with the Commission.

In addition, the RTOs/ ISOs and their transmission owner must, within 30 days, submit a detailed information report on how each RTO/ISO intends to ensure that adequate generation will be available to serve existing and new large loads.

• The reports should include the following:
  • any proposals under consideration in its stakeholder process to address the issue of resource adequacy to serve new large loads;
  • a detailed schedule of key milestones, such as stakeholder or board votes, that includes the estimated date on which they expect to file any such proposal with FERC; and any ongoing stakeholder processes that aim to increase the pace of adding generating capacity in the region. 

The RTOs and ISOs include PJM Interconnection, LLC (PJM); Midcontinent Independent System Operator, Inc. (MISO); Southwest Power Pool, Inc. (SPP); California Independent System Operator Corporation (CAISO); ISO New England Inc. (ISO-NE); and New York Independent System Operator, Inc. (NYISO).  FERC has also included the transmission owners in each RTO and ISO.

Context: Regional Differences at a Glance

The Commission recognizes that regional differences exist in the procedures and strategies implemented by grid operators to date and will continue to shape future proposals.  The orders have been designed to reflect these variations.  The following highlights several significant distinctions:

• The RTOs and ISOs and their transmission owners have different existing processes for studying transmission service requests on behalf of large loads, with some already pursuing stakeholder efforts to address the proliferation of large loads in their footprints.
• SPP stands out with its High Impact Large Load and High Impact Large Load Generation Assessment processes, which are expedited frameworks created to reliably serve massive new power demand from large loads such as data centers.
• FERC addresses co-located loads in PJM in a separate proceeding, in which it takes the next step with the issuance of item E-2 on this morning’s agenda.
• Transmission service models differ, including in CAISO, which does not offer traditional Order No. 888 transmission services.
• Roles and responsibilities for transmission planning are split differently among RTOs and ISOs and transmission owners across the regions.
• The orders leave room for each RTO and ISO to define large loads and to create operational requirements for those large loads that are particular to their region.
• The orders also account for regional differences on topics such as cost transparency, study processes, and network upgrades.