FERC Issues Decision on Co-Location of Large Loads

The Federal Energy Regulatory Commission (FERC) has issued an order directing PJM to reform its Open Access Transmission Tariff (OATT) rules for generators co-located with large loads such as data centers. Citing a lack of clarity and consistency in the current tariff, FERC instructed PJM to:

1. Establish clear terms for interconnection customers seeking to serve co-located loads.
2. Clarify the scope and capabilities of interconnection service when connecting new generation to co-located loads; and
3. Require customers serving co-located loads via transmission service to select one of three newly defined transmission service options.

Commissioner Perspectives

FERC Commissioner Rosner filed a concurrence, including a visual explanation, asserting that FERC’s order is necessary due to the rapid growth of large load projects and to ensure fair interconnection processes.

Commissioner Chang also concurred with the decision but emphasized that FERC’s order is only a first step in the broader interconnection reforms needed across the country to protect ratepayers from potential cost and reliability risks.

Extending Reforms Nationwide

On October 23, 2025, the Secretary of Energy directed FERC to initiate a rulemaking process to assert authority over the interconnection of large electrical loads to the U.S. bulk electric transmission system, prompted by rising electricity demand from data centers, advanced manufacturing, and other energy-intensive projects.

Following this directive, FERC began a nationwide rulemaking effort to manage increasing power needs, building on PJM’s reforms. Public comments on DOE’s 14 principles were collected and will be addressed by April 2026. Principle #14 specifically calls for compliance with NERC standards, including potential new registration categories or modified standards to safeguard the bulk-power system.

Implications for Utilities and Large Loads

FERC’s actions require significant updates to transmission analysis, facility design and NERC compliance programs for utilities. Several NERC standards may apply, and large loads could face new registration requirements. TRC clients can benefit from assessing how these regulatory changes affect their NERC compliance obligations.

Key standards potentially impacted include: FAC-001, FAC-002, PRC-006, PRC-012 and TPL-001.

TRC clients are strongly encouraged to assess how these regulatory changes may impact their NERC compliance obligations and overall power system planning strategies.