FERC orders six US grid operators to rework data-center rules

What this is about

On 18 June 2026 the Federal Energy Regulatory Commission (FERC), the US federal agency for electricity markets, ordered six regional grid operators to justify or revise their rules for connecting data centers and other very large electricity users. The five commissioners voted for tailored "show-cause" orders to PJM Interconnection, the Midcontinent Independent System Operator (MISO), the Southwest Power Pool, the California Independent System Operator (CAISO), ISO New England and the New York Independent System Operator. Texas, with its own ERCOT grid, was excluded. The legal basis is Section 206 of the Federal Power Act.

What the orders actually require

The grid operators must deliver two things. First, within 60 days, justify why their existing pricing and tariff structures can accommodate massive data centers — or reform those structures immediately. Second, within 30 days, submit a mandatory reliability report setting out how they will secure enough generation capacity for the large loads. Each order names five reform areas: more efficient application and study processes for connections, including alternative transmission technologies; preventing cost shifting and improving transparency; rules for co-location and behind-the-meter generation; new transmission services for flexible large loads; and a process to study generating facilities near large consumers.

Why it matters

The power appetite of AI data centers has become a bottleneck for their expansion. Anyone wanting to build a large data center increasingly fails not on capital or chips, but on the question of when, and on what terms, it may connect to the grid. With these orders FERC is trying to speed up connections while protecting ordinary consumers' electricity bills from cross-subsidies. The step traces back to an initiative that Energy Secretary Chris Wright directed the agency to consider in October 2025. For the industry, it means the rules under which data centers will receive power are being rewritten over the coming months.

In plain language

Picture a busy road that ever more huge factories want to connect to. The traffic authority tells the local road offices: prove to me within two months that your on-ramp rules can handle the surge without leaving residents stuck in jams — or change the rules right away. That is exactly what FERC is doing, only it concerns power lines instead of roads.

A practical example

A European cloud provider is assessing a site for an AI data center in the PJM region in the eastern US in 2026. Until now it was unclear whether it would get power in two years or five, and who would bear the cost of new lines. The FERC order gives it a timeframe: within 60 days PJM must disclose or reform its connection rules. The provider waits out this deadline before finalising the site, and plans in parallel for behind-the-meter generation to become less dependent on the grid connection.

Scope and limits

First, a show-cause order is not yet a new rule. The grid operators can defend their existing procedures, and any final reforms still have to be drafted and approved. Second, the measure affects only the six named US grid regions; Texas and markets outside the US are not covered. Third, faster connections do not automatically solve the underlying problem — enough power also has to be generated. Whether speed and reliability fit together will only become clear in the reports and follow-up proceedings.

SEO & GEO keywords

FERC, Federal Energy Regulatory Commission, show-cause order, PJM, MISO, CAISO, ISO New England, NYISO, Southwest Power Pool, AI data centers, electricity grid, Section 206, Chris Wright, large loads