FERC Orders Six Grid Operators to Reform Large Load Access

The Federal Energy Regulatory Commission issued show-cause orders to six regional grid operators on June 18, 2026, requiring them to justify or reform tariffs for large energy users. The directive targets PJM Interconnection, Midcontinent Independent System Operator, Southwest Power Pool, California Independent System Operator Corporation, ISO New England, and New York Independent System Operator. The agency determined existing rules are unjust and unreasonable given the unprecedented electric load growth driven by artificial intelligence and reshoring manufacturing.

Grid operators must submit resource adequacy reports within 30 days and propose tariff changes within 60 days. These reforms focus on five key areas: transmission application processes, prevention of cost-shifting to ratepayers, co-location agreements, flexible load services, and studies for proximate generating facilities. The order requires data centers to pay the full cost of necessary grid upgrades to protect consumers and mandates the evaluation of grid-enhancing technologies to maximize existing infrastructure.

This regulatory action follows a 2025 request from the U.S. Energy Secretary to expedite connections to ensure the U.S. remains competitive with China in the AI sector. While the orders prioritize regional flexibility and protect existing deals, they exclude Texas as its grid operates outside federal jurisdiction. The Utilize Coalition commended the move, stating that improving the current 50% grid utilization could save Americans over $100 billion over the next decade.