FERC’s New Interconnection Rules: What Buyers Need to Know

On June 18, 2026, the Federal Energy Regulatory Commission did something it rarely does to all six major U.S. grid operators at once: it opened Section 206 “show cause” proceedings against PJM, MISO, SPP, CAISO, NYISO, and ISO-NE simultaneously, ordering each to justify or rewrite its rules for connecting large loads — a category defined as any customer with peak demand above 50 MW at 69 kV or higher, which covers the overwhelming majority of hyperscale and large colocation campuses. The order set a 60-day clock. That clock ran out on August 17. The follow-on stakeholder comment period closed September 16. For anyone planning where to put the next 50, 100, or 300 MW of IT load, this is no longer a background policy story — it’s a live proceeding with real dates, real dockets, and early signals about which grid regions are about to get faster and which are going to keep buyers waiting.

What FERC actually ordered on June 18

The six orders (PJM under docket EL26-67, MISO EL26-70, SPP EL26-68, CAISO EL26-71, ISO-NE EL26-72, and NYISO EL26-69, all rolled into the broader large-load rulemaking docket RM26-4) trace back to an October 2025 letter from the Department of Energy pushing FERC to standardize how the grid handles data center interconnection requests. FERC’s response wasn’t another advance notice or a multi-year rulemaking — it was a Federal Power Act Section 206 show cause order, which puts the burden of proof on the grid operators to demonstrate their existing tariffs are just and reasonable, or fix them.

Each operator was told to address five things: a formal, predictable interconnection process specifically for large loads instead of ad hoc case-by-case handling; cost transparency rules that prevent the expense of accommodating a new campus from being silently shifted onto existing ratepayers; clear treatment of co-located and behind-the-meter generation (the on-site gas turbines, batteries, or small modular reactors buyers increasingly want paired with their load); a new transmission service class for loads that can curtail or flex during grid stress; and a siting study process for generation built adjacent to large loads. Intervention was due July 9, resource adequacy reports July 20, and the substantive show cause responses landed August 17 — six weeks before this writing.

PJM already showed its hand

Buyers don’t have to guess what compliance might look like, because PJM ran this play once already in a related but separate docket. In an April 16, 2026 order (EL25-49-000), FERC approved four concrete interconnection pathways PJM had proposed for generation serving co-located load: Reduced Capacity Service, which lets a project interconnect and be studied at less than its full nameplate capacity rather than being held to worst-case assumptions; Accelerated Processing, which lets qualifying projects skip ahead at Decision Points I and II when no further network upgrades are needed; Provisional Interconnection Service, allowing limited operation before every required facility is finished, subject to annual re-study; and Surplus Interconnection Service, which lets a new generator tap unused capacity at an existing interconnection point that its original owner isn’t fully using.

FERC didn’t rubber-stamp everything PJM wanted, though, and the rejection matters as a signal. PJM tried to redefine the “Point of Interconnection” as a “Point of Change in Ownership,” which would have shifted where responsibility and cost allocation attach. FERC said no, citing the risk of new disputes with transmission owners and project delays — a reminder that even in the RTO furthest along on this issue, the Commission is still drawing hard lines around cost allocation and ownership boundaries, not just handing out speed.

Why the scale of the backlog makes this urgent

The pressure behind these orders isn’t abstract. Lawrence Berkeley National Laboratory’s Queued Up: 2026 Edition, published in June 2026 using data through the end of 2025, put total active capacity sitting in U.S. interconnection queues at roughly 2,060 GW — more than 1,300 GW of generation and close to 750 GW of storage, spread across roughly 8,200 projects. LBNL’s data also shows the median time from interconnection request to commercial operation for projects that reached completion in 2025 now exceeds five years. That’s the queue data centers are trying to jump, or route around entirely through co-location and behind-the-meter generation, which is exactly why FERC’s show cause orders spend so much language on defining co-location rules rather than only on traditional interconnection speed.

It’s worth being precise about what these orders will and won’t fix. A show cause order forces grid operators to respond and puts real deadlines on the table, but it is not itself a new rule, and the RTOs/ISOs have latitude in how they comply — some will propose modest tariff tweaks, others more structural overhauls, and FERC still has to rule on each filing before anything is binding. Utilities and consumer advocates are also actively pushing back on cost-shifting concerns, worried that faster large-load interconnection could mean residential and commercial ratepayers quietly absorb network upgrade costs that used to be borne by the new load itself. Reliability, cost allocation methodology, and storage resource integration were also explicitly deferred out of the April PJM order and pushed into this broader RM26-4 proceeding, which means some of the thorniest questions are still unresolved even in the region furthest along. Treat this as the opening of a multi-year process with an unusually aggressive first sprint, not a switch that flips grid speed overnight. Our 2026 site selection breakdown goes deeper into the non-power regulatory friction — water permits, land use, zoning — that stacks on top of whatever FERC does here.

What this means if you’re planning capacity right now

For a buyer or developer with a live site search, three things follow directly from where this docket stands today. First, track each RTO’s compliance filing as it’s made public rather than waiting for a final FERC ruling — the show cause responses filed August 17 already show which grid operators are proposing real process changes (expect PJM-style pathways to spread) versus which are largely defending their existing tariffs, and that’s a leading indicator of where interconnection timelines will actually move. Second, if a target region hasn’t proposed anything resembling reduced capacity service, provisional service, or a surplus interconnection option, budget for today’s multi-year queue reality rather than assuming reform arrives on your timeline. Third, co-location and behind-the-meter generation are getting an explicit regulatory lane in most of these dockets, which makes on-site generation a more viable speed lever than it was a year ago — but only in the RTOs that adopt clear rules for it, since ambiguous treatment is precisely what FERC is trying to stamp out.

None of this replaces the fundamentals of site selection — land, fiber, water rights, and tax incentives still matter as much as they ever did. What’s changed is that the interconnection queue, historically the least controllable variable in a build timeline, now has an active federal proceeding attached to it with named dockets and passed deadlines you can actually monitor, region by region, the same way you’d track a permitting timeline or a construction schedule. That’s a meaningful shift from a year ago, when “the queue is slow” was simply a fact of life with no near-term forcing mechanism behind it. Buyers who build FERC docket tracking into their site selection process this quarter — watching for which RTOs file real tariff reforms versus which merely defend the status quo — will have a genuine time advantage over those who only find out about a rule change after a competitor has already locked in capacity under it.

Ready to put this into a repeatable process for your next site search? Get the TechInfraHub Data Center Buyer’s Toolkit for the frameworks and checklists to evaluate power, timeline, and regulatory risk before you sign.

Written by

Raajeev Ratra

Data Center Infrastructure Expert | 15+ Years in DC Design, Operations & Project Management

Raajeev is a seasoned data center professional with hands-on experience in hyperscale facilities, colocation design, power & cooling infrastructure, and global DC operations. He shares practical insights to help engineers and IT leaders build better infrastructure.

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