On October 23, 2025, the U.S. Department of Energy (“DOE”) took an extraordinary step in the evolving saga of large load interconnection. Energy Secretary Chris Wright directed the Federal Energy Regulatory Commission (“FERC”) to initiate a rulemaking proceeding that could fundamentally transform how large electricity consumers connect to the transmission grid.[1] If adopted by FERC, the move would represent one of the most significant assertions of federal jurisdiction over electricity markets in recent years, and it arrives at a time when rapid data center development has created an unprecedented demand for electric power.
Data Center Growth and Grid Constraints
Secretary Wright’s directive points to the surge of America’s electricity demand, driven primarily by the growth of data centers, domestic advanced manufacturing, and home and vehicle electrification. This demand surge has created bottlenecks across the country, as interconnection queues continue to grow with projects seeking grid access. Further, FERC has yet to definitively weigh in on disagreements over how to handle co-location arrangements—where data centers are paired with dedicated generation resources. Most notably, disputes in the PJM Interconnection region prompted FERC to hold a technical conference in November 2024 and later issue a show cause order in February 2025 directing PJM and transmission owners to explain how their tariffs address co-location arrangements.[2]
Jurisdiction over Large Load Interconnections
Historically, FERC has not exercised jurisdiction over load interconnections. That responsibility has resided primarily with state public utility commissions and individual utilities. Large industrial customers and data centers have worked through a patchwork of utility-specific processes governed by state law to secure transmission access. But the DOE’s directive seeks to change that paradigm, asserting that large load interconnections to the transmission grid—defined as facilities with peak demand exceeding 20 megawatts (MW)—fall “squarely within” FERC’s jurisdiction over interstate transmission.[3] It is safe to expect that this proposition will be challenged during any future rulemaking proceeding.
The ANOPR advances four primary legal justifications for FERC to assert jurisdiction over large load transmission interconnections. First, like generator interconnections, large load interconnections are a “critical component of open access transmission service” requiring minimum terms and conditions to ensure non-discriminatory treatment.[4] Second, the interconnection of large loads to the transmission system constitutes a practice that “directly affect[s]” FERC-jurisdictional wholesale electricity rates.[5] Third, by limiting FERC’s reach to transmission-level interconnections, the proposal asserts it does not impinge on states’ jurisdiction over retail electricity sales or generation facility siting.[6]Finally, FERC’s exclusive jurisdiction over interstate transmission service and the facilities used for such transmission supports this proposal.[7]
Principles for Reform
The ANOPR outlines a series of broad principles to guide FERC’s rulemaking. [8] These principles cover the following topics:
Applicability: Jurisdiction would be limited to transmission-level interconnections, and procedures would apply only to loads greater than 20 MW.
Financial Requirements: Interconnecting large loads would be subject to standardized deposits, readiness criteria, and withdrawal penalties similar to those for generators, deterring speculative projects.
Network Upgrades and Costs: Network upgrade costs would be directly assigned to large loads, and these would have the option to build any necessary interconnection facilities.
Co-Location: Interconnection requests should be studied together with any existing or proposed co-located generation for efficiency and minimization of network upgrade costs. Further, co-located facilities should be studied based on the amount of injection and/or withdrawal rights requested (e.g., a 500 MW load and a 600 MW generator would be studied only for the impacts of injecting 100 MW into the transmission system). Co-located facilities should be designed to prevent any injections/withdrawals beyond that which is studied.
Utility Operations & Planning: Utilities may only charge for transmission service based on the studied withdrawal rights. However, utilities should base ancillary service responsibilities on peak demand without consideration of co-located generation.
Incentivizing Flexibility: Interconnection studies should be expedited for large loads that agree to be curtailable and co-located facilities that agree to be curtailable and dispatchable.
Reliability Standards: Require compliance with NERC standards to protect the bulk-power system.
These principles are deliberately high-level, leaving detailed implementation to FERC’s rulemaking process. But they provide a clear roadmap signaling DOE’s priorities: standardization, cost accountability, flexibility incentives, and reliability protection.
Timeline and Path Forward
Secretary Wright’s directive contains an ambitious deadline: FERC must take “final action” on the rulemaking no later than April 30, 2026. FERC responded quickly. On October 27, 2025, the Commission issued a Notice Inviting Comments establishing Docket No. RM26-4-000 and setting an expedited comment schedule:
• Initial comments due: November 14, 2025
• Reply comments due: November 28, 2025
Under typical FERC rulemaking procedures, the process involves multiple stages: a discretionary ANOPR to gather initial input, a Notice of Proposed Rulemaking (“NOPR”) with concrete regulatory proposals, and a Final Rule announcing FERC’s decision. This entire process can take several years—Order No. 2003 on generator interconnection, for example, spanned from 2001 to 2005 with multiple orders on rehearing.
Although section 403 of the DOE Organization Act grants the Secretary of Energy authority to “propose rules, regulations, and statements of policy of general applicability” to FERC, it does not require FERC to adopt such proposals—only to “consider and take final action” on them.[9] Nevertheless, the arrival of newly confirmed Chair Laura Swett and Commissioner David LaCerte in October 2025—giving Republicans a Commission majority for the first time since 2021—may facilitate swift action aligned with the Administration’s energy priorities.
Implications and What Comes Next
If FERC proceeds as directed, it would mark the first time the Commission has exercised jurisdiction over load interconnections, fundamentally altering the regulatory landscape for data centers, industrial facilities, and other large power consumers.
For data center developers and hyperscalers, the proposal offers potential benefits—standardized procedures, clearer timelines, and potentially faster interconnection for curtailable loads—but also new federal oversight and cost responsibilities. The emphasis on curtailability and dispatchability as criteria for expedited processing could drive industry toward more flexible demand models.
For utilities and transmission owners, the proposal presents both opportunities and concerns. Standardized procedures could reduce case-by-case disputes and provide clearer frameworks for planning, but federal oversight over what has been a utility-controlled process may be seen as encroachment on operational autonomy and state regulatory prerogatives.
For states, the jurisdictional assertion raises fundamental questions about the federal-state balance in electricity regulation. While the ANOPR attempts to respect state authority over retail sales and distribution, the practical effect of federal control over transmission-level interconnections could constrain state flexibility in managing grid impacts and cost allocation.
The rapid growth of data centers has created genuine challenges requiring policy solutions. Whether those solutions should come through expanded federal jurisdiction or through enhanced state-federal coordination remains an important question. The answer FERC provides over the next six months will significantly impact electric markets for decades to come.
[1] Sec. of Energy’s Direction that the Federal Energy Regulatory Commission Initiate Rulemaking Procedures and Proposal Regarding the Interconnection of Large Loads Pursuant to the Secretary’s Authority Under Section 403 of the Department of Energy Organization Act 1 (Oct. 23, 2025), https://www.energy.gov/articles/secretary-wright-acts-unleash-american-industry-and-innovation-newly-proposed-rules (“DOE Directive”).
[2] See FERC, Large Loads Co-Located at Generating Facilities, Docket No. AD24-11-000, Third Supplemental Notice of Commissioner-Led Technical Conference (Oct. 10, 2024).
[3] DOE Directive at 1.
[4] DOE Directive, ANOPR at P 7.
[5] DOE Directive, ANOPR at P 14.
[6] DOE Directive, ANOPR at P 15.
[7] Id. at P 16.
[8] Id. at PP 17-32.
[9] 42 U.S.C. § 7173(a)-(b).
Keyes & Fox attorneys represent a broad spectrum of clients, including data center industry clients, at Public Utility Commissions across the country and at FERC. For questions regarding Keyes & Fox’s data center or FERC practice areas, please contact Nikhil Vijaykar at nvijaykar@keyesfox.com, Gonzalo Rodriguez at grodriguez@keyesfox.com, or Scott Dunbar at sdunbar@keyesfox.com.
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