FERC Puts Data Center Connections at the Forefront of U.S. Grid Planning
The Federal Energy Regulatory Commission (FERC) — the federal agency that oversees U.S. electricity markets and interstate transmission — is signaling a clear shift in priorities by placing the rapid connection of data centers to the nation’s grid near the top of its agenda. At a public meeting in November 2025, newly confirmed commissioners stressed that enabling reliable, timely interconnection for large computing loads is essential for national economic growth and resilience, particularly as artificial intelligence and digital infrastructure continue to expand. Utility Dive
Grid Reliability Meets Soaring Data Demands
Historically, FERC’s core mission has focused on ensuring the reliability, cost-effectiveness, and sufficiency of the U.S. power system. But with data centers increasingly drawing substantial amounts of electricity — sometimes rivaling the consumption of small cities — the agency’s leadership now views streamlined grid connection as central to that mission. At the November 20 open meeting, FERC Chair Laura Swett explicitly stated that connecting data centers efficiently “as quickly and as durably as possible” is a priority alongside maintaining affordable, reliable power. Utility Dive
FERC Commissioner David LaCerte echoed this commitment, calling for “bold action” to support economic and national security objectives tied to high-performance computing. Yet he also emphasized that safeguarding affordable energy for all consumers must remain a guiding principle in any policy shift. E&E News by POLITICO
Proposed Interconnection Reforms Under Review
At the heart of these discussions is a proposal from the U.S. Department of Energy (DOE) aimed at reforming how large electric loads — including data centers — connect to the transmission system. The DOE has recommended that FERC issue new rules to govern interconnection processes in a way that reduces delays and barriers for large industrial demands. The goal is to set a final rule by April 30, 2026, though the roadmap is still being refined in response to industry and state regulator feedback. Utility Dive
State utility regulators have raised concerns about potential overlaps in authority and the risk of imposing costs on other electric customers. Despite these concerns, FERC’s leadership appears determined to strike a balance between accelerating data center connections and protecting ratepayers from undue expense. E&E News by POLITICO
What This Means for Power Generation and Infrastructure
For data centers — and the broader power generation ecosystem that supports them — FERC’s focus could have wide-ranging implications:
• Interconnection Delays Could Ease:
Current interconnection processes often take years, requiring extensive engineering review, transmission upgrades, and multi-stakeholder negotiations. A revised framework could streamline these timelines, enabling operators to bring high-load facilities online faster and with more predictable outcomes.
• Encouragement of On-Site Generation:
As transmission upgrades lag or become costlier, data center developers and industrial buyers may increasingly consider on-site generation options — including industrial diesel and natural gas generators, combined heat and power (CHP) systems, and hybrid solutions — to ensure uptime and reduce reliance on congested grid points.
• Transparency in System Costs:
FERC’s attention on ratepayer protection suggests the agency will pressure transmission owners and utilities to clarify cost allocation in interconnection studies. This could help buyers and planners better estimate total project costs when evaluating grid connections versus self-supply strategies.
• Broader Industry Engagement:
By emphasizing stakeholder collaboration, FERC is signaling that data center operators, utilities, and power equipment partners (like generator dealers and EPC firms) will need to participate early in planning discussions to align infrastructure needs with evolving grid rules.
Balancing Speed and Fairness
One of the more challenging aspects of this shift is ensuring that reforms do not unfairly advantage data centers at the expense of existing customers. Recent grid proposals, including those to fast-track certain interconnections in regions like PJM Interconnection, were rejected by stakeholders concerned about fairness and cost sharing. FERC’s current leadership must navigate these dynamics carefully, promoting efficient processes without creating new inequities in the system. Utility Dive
Commissioner LaCerte’s comments reflect this tension — urging policies that support infrastructure development while protecting ratepayers from excessive charges related to grid expansion. This dual focus highlights FERC’s broader role as regulator: facilitating growth without compromising affordability and reliability. E&E News by POLITICO
Why It Matters for Generator Data Visitors
At Generator Data, we track how regulatory and market developments influence power supply strategies for mission-critical operations. FERC’s evolving approach could reshape where and how large loads secure reliable power — whether through grid interconnection, on-site generation, or a hybrid of both.
For data center operators, electrical contractors, service partners, and generator dealers, faster interconnection processes could translate to clearer planning horizons and reduced uncertainty in project timelines. At the same time, rising interest in behind-the-meter generation solutions — to complement or substitute for grid upgrades — reflects a practical response to the challenges of modern infrastructure planning.
As FERC continues refining its rules and soliciting stakeholder input, the Generator Data community will remain focused on delivering insights, tools, and connections that help power professionals navigate these changes with confidence.
Source: Reporting by Utility Dive, “New FERC commissioners say connecting data centers is key priority,” Nov. 21, 2025
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