FERC Orders Grid Operators to Fix Data Center Rules
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- FERC issued orders requiring the six major grid operators to propose interconnection reforms within 60 days and submit detailed reports within 30 days on ensuring adequate generation for existing and new large loads.
- Grid operators must design contracts so that if new transmission is built to serve a data center that never shows up, "other customers, especially regular consumers, will not be on the hook for those costs," Commissioner David Rosner said.
- In a 2023 incident, 60 data centers simultaneously dropped off PJM's Virginia grid after lightning struck a Dominion Energy transmission line, causing a sudden 1,500 MW demand loss that nearly triggered a voltage spike.
- Secretary of Energy Chris Wright ordered FERC last October to begin rulemaking, but SELC senior attorney Nick Guidi said the result "is not as ambitious as what Secretary Wright asked them to do."
- ERCOT reported five loss incidents greater than 100 MW from October 2023 to October 2024, illustrating how large loads can destabilize grids.
- State consumer advocates in Pennsylvania, Delaware, and New Jersey warned FERC that utilities could overbuild natural gas to meet forecasted data center demand, potentially stranding residential ratepayers with decades of pipeline costs.
- The order's cost protections are voluntary—not mandatory—for utilities in southeastern states like North Carolina, Tennessee, Alabama, and Georgia, where Guidi said massive data center buildouts are happening without ratepayer safeguards.
Why it matters: Roughly 200 million Americans across two-thirds of the U.S. depend on these grid operators, and ratepayers could absorb billions in stranded-asset costs if utilities overbuild natural gas generation for data centers that never connect or never materialize. FERC's voluntary approach toward southeastern states without regional transmission organizations leaves consumers in NC, TN, AL, and GA exposed to the same cost-shifting the order aims to prevent elsewhere.
