The Federal Energy Regulatory Commission had promised to act on large load interconnection by June 2026, and on June 18 it did, though not in the form many expected. Rather than issue a single national rule out of the advance notice of proposed rulemaking that the Secretary of Energy directed it to consider in October 2025, the Commission issued six tailored show cause orders under section 206 of the Federal Power Act, one to each of the regional transmission organizations and independent system operators it regulates: PJM, MISO, SPP, CAISO, ISO New England and NYISO.
Each grid operator and its transmission owners now have 60 days to do one of two things. They can explain why their existing tariffs remain just and reasonable without provisions written specifically for large loads, or they can file tariff changes that address the issues the Commission identified. Within 30 days, each must also file an informational report describing how it intends to ensure that adequate generation will be available to serve both existing and new large loads. That second requirement is the more pointed. It asks the operators to show, in writing, where the power will come from.
Five categories of reform
The Commission's announcement lists five areas that each order tees up. The first is efficient transmission service application and study processes, including consideration of alternative transmission technologies. The second is preventing cost shifting and requiring transparency into transmission costs. The third is accommodating co-location agreements and behind-the-meter generation. The fourth is new transmission services for flexible large loads. The fifth is a process to study generating facilities that serve electrically proximate large loads and co-located loads.
Read together, those categories describe a fairly complete agenda for how a data center should connect to an organized market. A large load should be able to get a timely answer on whether and when it can connect. It should pay for the network upgrades it causes, and other customers should be able to see those costs. If it sits next to a power plant, there should be clear rules on what grid services it still uses and pays for. If it agrees to curtail during stressed hours, it should be able to connect faster or on different terms. And if a developer builds generation specifically to serve a nearby load, there should be a study process for that pairing rather than forcing both through separate queues.
Why tailored orders instead of a rule
The ANOPR docket, RM26-4-000, defined large loads as demand greater than 20 MW and asked whether flexible loads could be studied within 60 days, among other questions. Commission staff reviewed more than 3,500 pages of public comments. The Commission's April 16 notice that it would act by June also listed what it had already done in the meantime: a December 2025 order requiring PJM to adopt transparent rules for loads co-located with generation, approval in January 2026 of SPP's High Impact Large Load initiative, and action on multiple individual tariffs and agreements, some accepted and some rejected for exceeding the Commission's jurisdiction or lacking reasonable cost allocation.
The show cause approach reflects a legal and practical reality. Retail service, including the decision to serve a new customer, is a state matter. FERC's authority runs to transmission service and wholesale markets. A single national rule risked a jurisdictional fight with states and utilities, and it would have struggled to fit six markets with very different structures. PJM has a capacity market and a co-location dispute that has been running for two years. SPP has already approved a large load framework. CAISO operates mostly vertically integrated utilities with state resource planning. ISO-NE and NYISO face smaller data center pipelines but tight winter supply. The Commission's announcement makes the point directly: because the six operators face distinct challenges, each order is tailored.
The ISO-NE order shows how the tailoring works. It directs ISO-NE to explain whether its tariff adequately addresses interconnection customers serving electrically proximate or co-located load, and it raises the Commission's concern about ISO-NE's need to ensure adequate generation for new large loads. The Commission also asked that any new provisions minimize disruption to existing commercial arrangements, which matters for data centers that have already signed agreements under current rules.
The generation question
The 30-day informational report deserves more attention than it has received. Grid operators do not build generation. In organized markets, generation is built by independent developers responding to price signals, or by utilities under state resource plans. Asking each operator how it will ensure adequate generation for large loads is, in effect, asking whether its market design is producing enough supply. For PJM, whose last capacity auction cleared 6,623 MW short of its reliability requirement, that is an uncomfortable question. For MISO, whose auctions have cleared with thin summer margins, it is not much easier.
The reports will not compel any specific action. They will, however, put each operator's plan on the record in a way that can be compared, and they may shape the next round of Commission action if the plans look inadequate.
What happens next
The 60-day responses are due in mid-August. Operators that choose to justify their existing tariffs will need to argue that general interconnection and transmission service rules already handle large loads well enough. That will be a hard argument in markets where data centers have waited years for service and where co-location deals have been contested. More likely, most will file at least some changes, building on stakeholder work already under way. PJM opened a Critical Issue Fast Path process in 2025 to address the integration of data centers and other large loads, and its stakeholders have already debated most of the categories the Commission listed. SPP's HILL framework provides a template that others may borrow.
Two issues will draw the most argument. The first is cost allocation for transmission upgrades driven by large loads, because it determines whether households and small businesses pay for lines built to serve data centers. The second is flexibility. A service that lets data centers connect sooner in exchange for curtailment rights could add capacity to the system without new generation, but only if the curtailment is real and enforceable. The Commission has put both on the table. The responses will show whether the grid operators are ready to answer them.