On June 18, 2026, the Federal Energy Regulatory Commission (FERC or the Commission) issued show cause orders under section 206 of the Federal Power Act to PJM Interconnection, L.L.C. (PJM), Midcontinent Independent System Operator, Inc. (MISO), Southwest Power Pool, Inc. (SPP), California Independent System Operator Corporation (CAISO), ISO New England Inc. (ISO-NE) and New York Independent System Operator, Inc. (NYISO), together with their transmission owners, directing each region to justify or reform the tariff provisions governing how data centers and other large loads connect to and receive service from the transmission grid. The orders are part of FERC’s broader response to rapidly increasing electricity demand, particularly from data centers and other large loads, and advance the objectives of the Secretary of Energy’s October 2025 Advance Notice of Proposed Rulemaking (ANOPR) by seeking to accelerate “speed to power” while preserving grid reliability, affordability and consumer protections.
Many expected the Commission to respond to the ANOPR by issuing a notice of proposed rulemaking (NOPR) setting out a proposed framework for connecting large loads to the transmission system. There are several reasons why the Commission likely opted for Regional Transmission Organization and Independent System Operator (RTO/ISO)-specific procedures:
- Speed: The issuance of a NOPR would have kicked off a more formal rulemaking process that would have required the Commission to solicit comments on its proposed framework, issue a final rule, and direct individual transmission providers to submit compliance filings. The likely result would have been a delay of a year or more before tariff changes were implemented. By directing each RTO/ISO to submit show cause responses on an expedited timeframe, the Commission effectively has fast-tracked the process in an effort to ensure that a coherent framework for large load is implemented sooner rather than later.
- Existing Regional Differences: RTOs/ISOs differ materially in the extent to which they have already adopted market rule changes to address large load interconnection. For example, SPP has submitted a number of filings over the past 18 months establishing large load-specific study processes, tailored transmission service products, and creating pathways for generation resources serving these customers to come online on an interim basis while they complete the full generator interconnection process. The Commission also has directed PJM to adopt new transmission service offerings and make other reforms to address large load customers through a separate proceeding. These differences likely made a one-size-fits-all approach less attractive to the Commission.
- Increased Role For RTOs/ISOs: By pursuing RTO/ISO-specific show cause orders, the Commission has placed the onus on each market to justify its existing tariff provisions or to adopt reforms that are consistent with the concerns expressed by the Commission and that account for regional needs. A NOPR would have placed the Commission in the position of having to defend a proposed large load framework.
The primary disadvantage of issuing show cause orders to each RTO/ISO was that the Commission’s actions did not extend to transmission providers located outside of these markets. However, at the Commission meeting, Chairman Swett encouraged transmission providers outside of RTO/ISO regions to pursue similar reforms through individual Section 205 proceedings. Additionally, the Commission’s issuance of show cause orders to the RTOs/ISOs would not preclude the Commission from taking actions related to non-RTO/ISO regions as it later deems necessary.
The following sections provide an overview of the Commission’s actions and the key features of the framework that the Commission appears to be encouraging the regions to adopt. Additionally, market-specific summaries of the show cause orders are available here: PJM, MISO, SPP, CAISO, ISO-NE, and NYISO.
Overview of the Commission’s Actions
The Commission preliminarily finds that the existing tariffs in FERC-jurisdictional RTO/ISO regions may be unjust and unreasonable because they do not contain clear and consistent provisions tailored to the integration of large loads and co-located loads. FERC emphasized that these customers present issues that existing tariff structures may not adequately address, including the timing and sequencing of transmission service studies, potential network upgrade costs, co-location with generation, behind-the-meter configurations, flexible load operations and cost-shifting concerns.
FERC directs each RTO/ISO and its transmission owners to make a filing within 60 days that either (i) explains why their current tariff remains just and reasonable without additional large load-specific provisions or (ii) proposes tariff revisions to address the issues identified by the Commission. FERC identified five categories of reform that will need to be addressed in each response:
- First, the Commission seeks more efficient transmission service application and study processes, including consideration of alternative transmission technologies that could reduce the need for upgrades, accelerate service or better use existing transmission capability.
- Second, FERC directs the regions to address cost-shifting concerns and provide greater transparency into transmission costs, including how costs associated with serving large loads are identified, allocated and communicated.
- Third, the orders require attention to co-location arrangements and behind-the-meter generation, including situations where a large load is located near or paired with generation and may not fit neatly within traditional transmission service models.
- Fourth, FERC seeks consideration of new transmission services for flexible large loads, recognizing that some large customers may be capable of curtailing, shaping or otherwise managing demand in ways that could support reliable grid operations.
- Fifth, the orders call for establishing processes to study generating facilities that serve electrically proximate large loads and large co-located loads, so that the grid impacts of those arrangements can be evaluated in a transparent and reliable manner.
FERC emphasized regional flexibility and acknowledged that the six RTOs/ISOs differ in market design, geography, stakeholder processes, planning responsibilities, existing transmission service models and current progress on large-load reforms. For example, SPP already has developed High Impact Large Load and related generation assessment processes to study large-load additions and electrically proximate generation.1 PJM’s co-location issues are being addressed in a separate proceeding,2 while CAISO’s market differs because it does not offer physical transmission services. The orders leave flexibility for each region to define large loads and develop operational requirements suited to its own system.
FERC also made clear that the orders are not intended to intrude on state authority. The Commission framed its action as focused on Commission-jurisdictional transmission service and transmission cost shifting, while leaving retail customer protections to state regulators. FERC also stated that the orders are not intended to disrupt existing large-load agreements or agreements nearing completion, and that RTOs/ISOs should provide a reasonable transition period for such arrangements when they file tariff revisions.
In addition to establishing the 60-day tariff response deadline, FERC is requiring RTOs/ISOs and transmission owners to submit informational reports within 30 days explaining how each region intends to ensure adequate generation will be available to serve existing and new large loads. The informational reports must identify relevant stakeholder proposals, provide milestone schedules for stakeholder or board action, estimate when any proposals may be filed with FERC and describe ongoing efforts to accelerate the addition of generation capacity.
RTOs/ISOs and transmission owners may seek abeyance within 45 days, and interested parties may respond to the regional filings within 30 days. FERC also left the Secretary of Energy’s ANOPR docket open for potential further action and encouraged utilities outside RTO/ISO regions to consider making section 205 filings addressing similar large-load issues.
Copies of the presentation provided by staff and a one-page fact sheet released by FERC are available online.
Key Features of the Commission’s Large Load Framework
Although the show cause orders do not impose a single national tariff or interconnection rule, the Commission’s orders provide the most coherent and comprehensive view to date of the types of processes and rules that transmission providers should adopt to facilitate the integration of large load customers while maintaining system reliability and protecting ratepayers. The central elements of that framework are summarized below.
- A defined class of “large load” and “co-located loads” subject to special tariff treatment. The orders distinguish between large loads and co-located loads. A large load is defined as a new commercial or industrial customer with peak load of 50 MW or greater, connected above 69 kV, and not itself part of a co-location arrangement. Co-located load is defined as end-use customer load that is physically connected to the facilities of an existing or planned generating facility on the customer’s side of the point of interconnection.
- A mandatory, transparent transmission service application and study process for large loads. The Commission encourages the RTOs/ISOs to establish clear procedures for Eligible Customers seeking transmission service on behalf of large loads, including application requirements, study procedures, and ongoing operational obligations. To deter speculative requests, the process should include readiness requirements, such as meaningful financial milestones and financial commitments. At the same time, the Commission seeks to remove barriers to large load integration by requiring the evaluation of alternative transmission technologies and encouraging customers to be studied in a manner that corresponds to their operational characteristics and contractual commitments.
- Clear tariff rules for co-location and behind-the-meter generation. For regions other than PJM, the orders press for tariff provisions addressing the rates, terms, and conditions that apply to co-location arrangements and load with behind-the-meter generation. The apparent goal is to make clear when transmission service is required, how withdrawals are measured, what operational limits apply, and how co-located load differs from generation interconnection service.
- Tailored transmission services. The orders encourage the RTOs/ISOs to adopt transmission products that are tailored to the characteristics of large loads, including flexible large loads that are able and willing to limit their energy withdrawal under certain conditions. Building on its prior directives to PJM to adopt contract demand transmission service for co-located load, the orders encourage the RTOs/ISOs to adopt firm and non-firm transmission service products that reflect the extent to which large loads rely on the grid and/or are able to curtail their demand. To expedite the integration of these loads, the orders also encourage the creation of an interim transmission service that would allow large loads to take service on an as available basis while network upgrades are completed.
- “Bring your own new generation” pathways. The orders encourage RTOs/ISOs to adopt generator interconnection procedures that provide for the study of generation resources that are willing to limit their output to match the demand of electrically proximate or co-located loads. The orders highlight SPP’s High Impact Large Load Generator Assessment process—which allows generation resources to receive an interim right to inject electricity up to the hourly forecast of an associated large load prior to completing the standard interconnection process—as a potential model. The order also contemplates a interconnection process that would provide for the evaluation of co-located load and generation that agree to limit their net injection into the transmission system.
- Greater financial commitments for large loads: The Commission encourages the RTOs/ISOs to adopt pro forma agreements that would require Eligible Customers serving large loads to make a minimum financial commitment towards necessary upgrades in the event that the large load does not materialize or takes less service than initially contemplated to address the risk of stranded costs. In effect, the Eligible Customer and large load would be required to backstop the costs of needed network upgrades in the event that the large load does not commence operation as expected. The result will be to increase the financial risks borne by large load customers seeking to interconnect within the regions.
1 Southwest Power Pool, Inc., Docket No. ER26-247-000, Tariff Revisions to Add the High Impact Large Load Processes and High Impact Large Load Generation Assessment (filed Oct. 24, 2025); see also Southwest Power Pool, Inc., 194 FERC ¶ 61,031 (2026) (order accepting tariff revisions subject to condition).
2 PJM Interconnection L.L.C., et al., 190 FERC ¶ 61,115 (order directing PJM to show cause as to why its tariff is just and reasonable or to propose tariff revisions as to the rates, terms, and conditions of service that apply to co-location arrangements); PJM Interconnection, L.L.C., 193 FERC ¶ 61,217 (2025), order on reh’g, 195 FERC ¶ 61,209 (2026) (PJM co-location orders).
