FERC issues targeted orders to accelerate data center grid interconnection (June 18, 2026)

On June 18, 2026, the Federal Energy Regulatory Commission issued tailored show-cause orders under Section 206 of the Federal Power Act to all six U.S. regional grid operators—PJM, MISO, SPP, CAISO, ISO-NE and NYISO—directing them to justify or reform tariff provisions governing how data centers and other large loads (defined as >20 MW) connect to the transmission grid. The action fulfills a directive from the U.S. Department of Energy Secretary Chris Wright (issued October 2025) to accelerate interconnection for AI data centers amid unprecedented electricity demand.

Rather than pursuing a broad national rulemaking (which would face state-level legal challenges), FERC opted for region-specific show-cause orders that preserve jurisdictional flexibility. Each RTO/ISO must propose new interconnection processes, including expedited study timelines (as short as 60 days) for loads that can demonstrate demand flexibility. FERC also specified that utilities can require large customers to fund their own network upgrades, reducing pressure on existing ratepayers. The orders acknowledge that grid growth—when done right—lowers per-unit electricity costs: studies show every 10% increase in state consumption correlates with ~6 cents/kWh retail price reductions.

For infrastructure architects and data center operators, this is the first major federal action on the interconnection queue backlog that's created a multi-year lag for new facilities. The orders eliminate ambiguity on co-located generation, cost allocation, and flexible-load treatment, removing a critical blocker for new build-outs. States (North Dakota, Louisiana, Mississippi, Virginia) that moved early already show cost and grid-stability benefits; this framework lets every region compete equally for the next wave of AI capacity.