US to Fast-Track AI Data Centers as Power Bottleneck Becomes National Priority
The Federal Energy Regulatory Commission ordered the U.S. regional grid operators to justify or rewrite rules for connecting data centers and other large electricity users, escalating a federal push to clear power bottlenecks that have become one of the biggest constraints on AI infrastructure.
The commission on Thursday issued show-cause orders to all six regional transmission organizations and independent system operators under its jurisdiction, directing them and their transmission owners to explain within 60 days why existing tariffs remain adequate or propose changes tailored to large loads.
The move targets a growing problem for data center developers, utilities and state regulators: AI campuses, advanced manufacturing sites and other large customers are seeking hundreds of megawatts — and in some cases gigawatt-scale — power commitments faster than transmission systems, generation queues and planning rules were designed to handle.
FERC said the orders are meant to deliver “speed to power” for large energy users while protecting consumers from bearing inappropriate costs. The agency framed the action as part of a broader federal effort to support the U.S. AI buildout, strengthen national security and reshore manufacturing, while preserving reliability and affordability across regional power markets.
“We are setting the stage for a resilient, reliable, and forward-thinking grid that empowers communities and safeguards consumers by transforming the way large energy users access the grid,” FERC Chairman Laura V. Swett said in the release. She said the commission also sought to give investors greater certainty by protecting existing deals while creating new paths for technological and economic expansion.
The orders cover PJM Interconnection, the Midcontinent Independent System Operator, Southwest Power Pool, California ISO, ISO New England and the New York ISO. They do not cover Texas’ main grid, ERCOT, which is largely outside FERC’s jurisdiction.
The directive does not create a single national interconnection rule for data centers. Instead, FERC said it is taking a region-by-region approach because the grid operators differ in market design, geography, stakeholder processes and the extent to which they have already started adapting to large-load growth.
Each grid operator must address five areas: faster transmission service applications and study processes, including alternative transmission technologies; safeguards against cost shifting and greater transparency into transmission costs; rules for co-location and behind-the-meter generation; new transmission services for flexible large loads; and study processes for generation facilities serving nearby or co-located large loads.
FERC also ordered each grid operator and its transmission owners to file a separate report within 30 days explaining how they plan to ensure adequate generation is available to serve existing and future large loads.
The action comes as the AI infrastructure boom has turned access to electricity into a central commercial and policy issue. Data center developers are increasingly seeking sites with direct access to high-voltage transmission, nearby generation or behind-the-meter power arrangements. At the same time, utilities and grid operators have warned that unchecked large-load growth could strain reliability, require costly transmission upgrades and raise questions about who pays for new infrastructure.
For AI data center developers, the FERC orders could help reduce uncertainty around how large projects are studied and connected. For utilities and states, the orders also signal that federal regulators are seeking more standardized guardrails around cost allocation, resource adequacy and customer flexibility.
The commission stressed that the orders are not intended to override state authority over generation siting, permitting or retail electricity rates. FERC also said the proceedings should not disrupt existing agreements that large-load customers have already negotiated or are close to finalizing.
That distinction is important because the data center buildout has faced growing local and state-level scrutiny over land use, water consumption, noise, backup generation and rising power bills. In several markets, community pushback and utility planning concerns have slowed or complicated data center projects even as hyperscalers, AI cloud providers and infrastructure developers continue to race for power capacity.
The FERC action builds on earlier steps taken over the past year, including a December 2025 order directing PJM to adopt clearer tariff rules for large loads co-located with generation. PJM, which serves much of the Mid-Atlantic and includes Northern Virginia’s data center corridor, has become one of the most closely watched markets as AI-driven load growth collides with power supply constraints.
FERC also pointed to the Southwest Power Pool’s High Impact Large Load initiative, which created new study processes for large loads and electrically proximate generation, as one example of regional efforts already underway.
The latest orders follow more than 3,500 pages of public comments submitted in FERC’s large-load interconnection docket and months of coordination with stakeholders and federal agencies. Energy Secretary Chris Wright had previously pushed the commission to consider reforms for large-load interconnections as part of the administration’s effort to accelerate AI infrastructure and power-intensive manufacturing.
