DOE Directs FERC To Consider Groundbreaking Rules Related to Large Load Interconnection

On October 23, 2025, the Secretary of Energy (“Secretary”) invoked a rarely utilized provision of the Department of Energy Organization Act (“DOE Act”),[1] directing the Federal Energy Regulatory Commission (“FERC”) to initiate preliminary rulemaking procedures, through a proposed Advance Notice of Proposed Rulemaking (“ANOPR”) that would consider potential reforms to enhance the timeliness and processes related to the interconnection of large loads to the transmissions system.

As the Secretary explained, the driving factor for the proposed ANOPR is the expected extraordinary rate of growth of large loads—anticipated to be higher than at any point in the past two decades—and the increasing quantities of large commercial and industrial loads, most notably data centers, that are connecting rapidly to the transmission system.[2] In turn, the ANOPR proposes to standardize the interconnection procedures and agreements for such loads, including those seeking to share a point of interconnection with new or existing generation facilities (i.e., “hybrid facilities”).[3]

The Secretary’s proposal that FERC adopt standardized interconnection procedures and agreements for the electric interconnection of end-use customers—a function typically regulated at the state level—would be groundbreaking.  With that said, the ANOPR posits that there are at least four legal justifications for such application of FERC’s jurisdiction, vis-à-vis the proposed rulemaking, including that: (1) large load interconnections are a critical component of open access transmission service (an area regulated by FERC), (2) under the Federal Power Act, the interconnection of large loads to the transmission system falls under a practice directly affecting Commission-jurisdictional wholesale electricity rates (an area also regulated by FERC), (3) the Secretary’s proposal avoids impinging on States’ authority over retail electricity sales by addressing the interconnection of large loads to the transmission system, but not over state-regulated retail sales of electricity to such large loads, and (4) FERC has exclusive jurisdiction over the transmission of electric energy in interstate commerce, including the rates, terms, and conditions of transmission service, and all facilities for such transmission or sale of electric energy at wholesale in interstate commerce, and therefore, any large load that seeks to interconnect to the transmissions system does so to obtain transmission service and “the appurtenant benefits of such.”[4]

The ANOPR goes on to provide a set of fourteen principles to inform FERC’s potential rulemaking.  These principles are:

1. FERC’s jurisdiction should be limited to interconnections directly to transmission facilities (as opposed to lower voltage distribution lines, as defined in accordance with FERC’s longstanding seven-factor test);[5]
2. The reforms should only apply to new loads that are greater than 20 MW and, for hybrid facilities, where the load is greater than 20 MW (however, the ANOPR would invite comments on alternative thresholds).[6]
3. To the extent practicable, load and hybrid facilities should be studied together with generating facilities in order to potentially reduce the network upgrades needed to interconnect only the load or only the generating facility;[7]
4. Like generating facilities, load and hybrid facilities should be subject to standardized study deposits, readiness requirements, and withdrawal penalties;[8]
5. Hybrid facilities should be studied based on the amount of injection and/or withdrawal rights requested;[9]
6. Any hybrid interconnection shall be required to install system protection facilities necessary to prevent unauthorized injections or withdrawals that exceed respective rights;[10]
7. The interconnection study of large loads that agree to be curtailable, and hybrid facilities that agree to be curtailable and dispatchable, should be expedited;[11]
8. Load and hybrid facilities should be responsible for 100% of the network upgrades that they are assigned through interconnection studies;[12]
9. To the extent the interconnection customer is not the transmission owner, the interconnection customer shall be afforded the same (or equivalent) option to build as currently provided to generator interconnection customers;[13]
10. An existing generating facility that seeks to enter a partial suspension to serve a new load at the same location must go through a system support resource / reliability must run type study;[14]
11. Utilities serving large loads, including those at hybrid facilities, should be responsible for transmission service based on their withdrawal rights;[15]
12. Utilities serving large loads, including those at hybrid facilities, should be responsible for ancillary services based on peak demand, without consideration of any co-located generation (and any co-located generating facilities will similarly be fully compensated for the provision of ancillary services);[16]
13. There must be a “plan” to implement these proposed reforms (as such, the ANOPR seeks comment on appropriate transition plans, including the treatment of large load interconnections that are already being studied for interconnection);[17]

14. Utilities serving large loads must meet all applicable reliability standards of the North American Electric Reliability Corporation (“NERC”) and any applicable open access transmission tariff provisions.[18]

     

Finally, we note that in addition to the ANOPR, other initiatives and reforms to address large load interconnections and associated impacts are pending, or are expected to soon be before, FERC.  These initiatives include:

1. the Southwest Power Pool, Inc.’s “High Impact Large Load” and High Impact Large Load Generation Assessment”, which filed at FERC on October 24, 2025;[19] 

2. a first-of-its-kind, “Transmission Service Agreement”, filed by PECO Energy Company on September 23, 2025, to address the interconnection of a proposed Amazon Data Services, Inc. data center;[20] and 

3. PJM Interconnection, LLC’s anticipated reforms related to large load customers, which are expected to be filed with FERC in the coming months. 

    

Please contact us if you have any questions regarding the proposed ANOPR or other developments related to large load interconnections and associated issues.   

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