Department of Energy Proposes Rules to FERC on Large Load Interconnections

On October 23, 2025, the U.S. Department of Energy (DOE) sent a letter to the Federal Energy Regulatory Commission (FERC or the Commission) proposing that FERC initiate a rulemaking on the interconnection of large loads, such as artificial intelligence (AI) data centers. The DOE proposed 14 principles it requests FERC to consider in its rulemaking and lays out rationale for why FERC has jurisdiction over large loads.

Separately, the DOE also sent a letter to FERC issuing a proposed rulemaking on preliminary hydropower licenses, proposing that FERC not deny applications for preliminary permits solely based on opposition from third parties, such as other federal agencies.

Prior Large Load Actions

The DOE letter notes that FERC must give prompt attention to the interconnection of AI data centers and other large loads to the transmission system. Although FERC has yet to issue a rulemaking on this issue, it convened a technical conference on November 1, 2024, regarding co-locating large loads at generating facilities. That same day, it rejected amendments to a PJM interconnection agreement that would have allowed a nuclear power plant to sell directly to a co-located large load. On October 27, 2025, FERC rejected proposed tariff changes from Tri-State Generation and Transmission, Inc. (Tri-State) that would have established a process for Tri-State to evaluate and integrate large loads that exceed 45 MW. FERC rejected the proposal on jurisdictional grounds, noting that several provisions intruded into the retail rate authority of states, and because the proposal had the potential to be unjust and unduly discriminatory.

In the past few years, Regional Transmission Operators (RTOs) and Independent System Operators (ISOs) have also taken up their own work on large load interconnections. For example, PJM initiated a Critical Issue Fast Path process to explore the development of large loads connecting to the grid and asked FERC to explore which co-location arrangements are FERC jurisdictional. Southwest Power Pool has developed a High Impact Large Load policy aimed at accelerating the approval process for large users of energy to the grid.

DOE’s Proposal

The DOE letter argues that FERC has and should exercise its legal authority to assert jurisdiction over large load interconnections and then requests that FERC consider 14 proposed principles in a rulemaking.

These principles generally fall into five categories:

Scope of the Rulemaking

• Limiting FERC’s jurisdiction to interconnections connected to transmission systems directly to avoid affecting state jurisdictional issues;
• Applying the reforms only to new loads greater than 20 MW;

Study Requirements

• Studying load and hybrid facilities together with generation facilities for efficient siting and to minimize network upgrades costs;
• Subjecting load and hybrid facilities to standardized study deposits, readiness requirements, and withdrawal penalties;
• Studying hybrid facilities on the requested amounts of injection and/or withdrawal rights;
• Expediting the study of large loads and hybrid facilities that agree to be curtailable;
• Requiring existing generation facilities, which seek to enter into partial suspensions to serve a new load at the same location, to undergo system support resource or reliability must run studies;

Facility Requirements

• Making load and hybrid facilities responsible for 100% of the network upgrades assigned to them in their interconnection studies;
• Requiring hybrid interconnections to install system protection facilities to prevent the facilities from unauthorized injections or withdrawals;
• Allowing interconnection customers the same or equivalent option to build that generator interconnection customers have;

Utilities Serving Large Loads Requirements

• Requiring utilities to be responsible for transmission service based on the withdrawal rights of large loads;
• Requiring utilities to be responsible for ancillary services based on peak demand without considering co-located generation (and compensating co-located generation facilities for providing ancillary services);
• Requiring utilities to meet all applicable reliability and open access standards; and

Future Planning

• Creating an appropriate transition plan to implement these principles.

The DOE letter notes that its proposal is not meant to discourage public utilities from making their own filings to address these issues as well.

Next Steps

The DOE’s letter requests FERC consider and act no later than April 30, 2026. FERC may, but is not required, to respond.