Breaking: DOE Directs FERC to Fast-Track New Rules for Large Load Interconnections

In a major move set to reshape how large loads connect to the grid, the U.S. Department of Energy (DOE) formally directed the Federal Energy Regulatory Commission (FERC) to assert jurisdiction over load interconnections to the transmission grid and launch a rulemaking aimed at standardizing and expediting large load interconnection—think AI data centers and major industrial facilities—directly to the transmission system. 

Actioning this directive from DOE may be one of Chairman Laura Swett’s first moves as chairman of FERC, a position to which she was appointed the same day DOE released its directive.

What’s Happening?

On October 23, 2025, the secretary of energy invoked special authority to send FERC a letter urging it to commence a rulemaking proceeding based on an attached proposed Advance Notice of Proposed Rulemaking (ANOPR) that would radically reform the process for interconnecting large loads (generally 20 MW and above) to the transmission grid and establish a path for co-located generation and load to interconnect on a “hybrid” basis. The letter seeks FERC action by April 30, 2026. 

Why Now?

The DOE points to a surge in demand growth—the highest in two decades—driven largely by the rapid growth of large commercial and industrial users, especially data centers. Accordingly, the DOE argues that “it has become necessary to standardize interconnection procedures and agreements for such loads, including those seeking to share a point of interconnection with new or existing generation facilities (hybrid facilities).”

The DOE’s letter comes on the heels of last year’s technical conference, Large Loads Co-Located at Generating Facilities,[1] a PJM Interconnection L.L.C. co-location proceeding from 2025 related to large load interconnections in that market,[2] and yet another technical conference last week on managing grid reliability, one panel of which focused on ensuring liability with large loads.[3]

Does FERC Have Jurisdiction?

The DOE’s letter asserts the view that “interconnection of large loads directly to the interstate transmission system to access the transmission system and the electricity transmitted over it falls squarely with” FERC’s jurisdiction, even though FERC has not historically asserted that jurisdiction. The proposed ANOPR elaborates slightly on legal justifications for FERC’s jurisdiction over large load interconnections, including:

• Large load interconnections are a “critical component of open access transmission service” that require minimum terms and conditions (similar to how generation or interconnections are already regulated) to ensure non-discriminatory transmission service.
• Large load interconnections directly affect wholesale electricity rates—which FERC is mandated to keep just, reasonable, and non-discriminatory—thereby giving FERC jurisdiction.
• The proposed reforms will steer clear of state authority over local distribution and generation siting—both of which the Federal Power Act (FPA) expressly leaves to state jurisdiction—and focus strictly on transmission-level connections. The proposed ANOPR asserts that “[e]ven if the large load seeking to interconnect to the transmission system is an end-use customer, the proposal does not exert jurisdiction over any retail sales to the large load.”
• The proposed ANOPR argues that this move aligns with the core purposes of the FPA: to regulate interstate transmission and wholesale sales, and it notes that 
  “[a]ny large load that seeks to interconnect to the transmission system does so to obtain transmission service and the appurtenant benefits” of interconnecting to the transmission system, such as open and non-discriminatory access to capacity, energy, and ancillary services.

The issue of FERC’s jurisdiction to regulate load interconnections is fraught and falls into another potential crack between state and federal zones of jurisdiction over the energy grid. While the FPA grants FERC clear jurisdiction over transmission service in interstate commerce, and FERC has long maintained that interconnection (at least of generation) is a form of transmission service, loads are retail customers that consume energy from the grid, and historically, states have exercised jurisdiction over both retail sales to loads and the connection of the loads to the grid. Over the years, the scope of FERC’s jurisdiction over other services that blur the line between wholesale markets and retail customers—such as demand response compensation in wholesale markets—has generated significant controversy with litigation all the way to the U.S. Supreme Court.[4] Expect the issue of FERC’s jurisdiction over large load interconnections to be front and center in responses to any ANOPR FERC may issue in response to DOE’s letter.

What’s on the Table for Reform?

The proposed ANOPR outlines 14 principles for FERC to use in standardizing interconnection procedures and agreements for large loads. Here are some key highlights:

• Scope: the proposed ANOPR envisions new rules that apply to large loads connecting at the transmission level, not local distribution. The proposed ANOPR proposes a 20 MW load size threshold, but seeks comments on alternative thresholds and whether a threshold is necessary at all.
• Process: the proposed ANOPR would have FERC develop rules and standardized study processes to study stand-alone large loads and “hybrid” facilities with co-located load and generation. The proposed ANOPR seeks comment on the extent to which FERC could lean on existing generator interconnection process concepts regarding study deposits, readiness requirements, withdrawal penalties and the like for large load interconnections.
• Special emphasis on hybrid facilities: the proposed ANOPR contemplates explicit rules that favor hybrid facilities where load and generation co-locate behind the same point of interconnection. The proposed ANOPR would cause such hybrid facilities to be studied on the basis of net injection or net withdrawal from the grid, thereby reducing study time and upgrade costs for many projects compared to the generation and load being studied separately as they are in most regions today. In addition, hybrid facilities would only pay network transmission charges that would be calculated based on the net of load MW and generation MW behind the meter, similar to the ERCOT private use network model. The issue of responsibility for network service charges is also front and center in the PJM Co-location proceeding.[5] The ANOPR would also require hybrid interconnections to install necessary system protections to prevent unauthorized injections or withdrawals that exceed the rights received through the load interconnection process. This aspect of the proposed ANOPR also implicates an issue in the PJM co-location proceeding that generated significant dispute among stakeholders.
• Option to Build: The proposed ANOPR proposes that interconnection customers (if not the transmission owner) must have the same option to build as is currently provided to generator interconnection customers.
• Expedited Path: The proposed ANOPR proposes expedited interconnection studies for large loads willing to be curtailed or hybrid facilities willing to be dispatched and seeks comment on whether such studies can be completed within 60 days.
• Implementation and Coordination with Current Queue: The proposed ANOPR requests comment on how, through a transition plan, large load interconnections already being studied for interconnection should be treated. Implementation—especially treatment of hybrid facilities and the “fast track” nature of this option compared to stand-alone generator interconnection—is likely to be a thorny issue.

What’s Next?

Industry stakeholders should prepare to weigh in on key issues like jurisdiction, size thresholds, study integration, standardized procedures, cost allocation, and reliability impacts. The secretary requested that FERC take final action by April 30, 2026. Assuming FERC proceeds in normal order, it would need to issue the proposed ANOPR, issue a subsequent notice of proposed rulemaking (NOPR) with a concrete proposal for regulations governing large load interconnections, and, finally, issue a final rule, which can be challenged in the federal courts of appeal. However, because FERC has been engaged in this issue through different technical conferences and the PJM Co-location Proceeding over the last year, FERC may go straight to an NOPR if FERC thinks it has collected enough information in those dockets.

[1] FERC, Technical Conferences: Commissioner-led Technical Conference Regarding Large Loads Co-Located at Generating Facilities, Docket No. AD24-11-000, https://www.ferc.gov/news-events/events/commissioner-led-technical-conference-regarding-large-loads-co-located.

[2]PJM Interconnection, L.L.C., et al., 190 FERC ¶ 61,115 (2025) (“PJM Co-location Proceeding”).

[3] FERC, Third Supplemental Notice of Reliability Technical Conference (October 15, 2025), https://www.ferc.gov/media/third-supplemental-notice-docket-no-ad25-8-000.

[4]See F.E.R.C. v. Elec. Power Supply Ass’n, 577 U.S. 260 (2016).

[5] PJM Co-location Proceeding. For more background on the PJM Co-location Proceeding, see Jane Rueger & Jacob Neeley, FERC Initiates Proceeding on Co-Location of Power Demand with Generating Facilities, Raising Issues That Will Reverberate Across Energy Industry (Feb. 26, 2025), https://perkinscoie.com/insights/update/ferc-initiates-proceeding-co-location-power-demand-generating-facilities-raising; New Project Media, Episode 146: Jane Rueger & Jacob Neeley | Perkins Coie (April 22, 2025), https://newprojectmedia.com/npm-interconnections-us-episode-146-jane-rueger-jacob-neeley-perkins-coie/.