The Federal Energy Regulatory Commission unanimously ordered the six largest U.S. regional grid operators to defend or rewrite the rules governing how AI data centers connect to the transmission system, giving them 60 days on tariffs and 30 days to file separate reports on generation adequacy. The show-cause orders, issued June 18, name PJM Interconnection, the Midcontinent Independent System Operator, Southwest Power Pool, the California Independent System Operator, ISO New England, and the New York Independent System Operator.

The directive insists that data centers must be “able to connect to the transmission system in a timely and orderly manner,” while bearing their own interconnection costs rather than shifting them onto existing ratepayers. FERC flagged five areas of potential tariff reform, including cost allocation, co-location, and proximate generation evaluation, and instructed operators to consider “alternative transmission technologies” and accommodate behind-the-meter generation. The order followed a review of more than 3,500 pages of docket comments.

“We’re holding grid operators accountable with tight, ambitious deadlines because the stakes are high and the country demands urgency,” FERC Chairman Laura Swett said in a post-meeting briefing.

The structural problem the order doesn’t solve is generation. Data center electricity demand is expected to nearly triple through 2035, and PJM’s capacity auction clearing price has climbed from $28.92 to $329.17 per megawatt-day in two years. A faster on-ramp doesn’t conjure megawatts; it sequences a queue. By assigning interconnection costs to hyperscalers and ringfencing ratepayers, FERC is borrowing the political logic of the 2008 TARP framing: socialize the infrastructure, privatize the bill. Further rulemaking is expected later in June 2026.

Whether the six operators can rewrite tariffs faster than capacity erodes is now the load-bearing question. The deadline is procedural. The shortage isn’t.

Sources