The U.S. Federal Energy Regulatory Commission (FERC) has issued a unanimous order requiring regional grid operators to expedite the connection of large energy users, specifically artificial intelligence data centers, to the national electric transmission system. The move aims to address bottlenecks that have seen tech companies wait years to secure necessary power supplies.
FERC Chair Laura Swett described the decision as a “historic” step toward modernizing the electricity market. Under the new guidelines, data center operators are required to pay the full cost of any grid upgrades necessitated by their connection, a measure intended to shield residential ratepayers from additional financial burdens. FERC stressed that the order respects state authority over retail electric rates and terms.
The six regional grid operators affected by the mandate, which serve approximately 200 million Americans, have been given 30 days to report on how they will ensure adequate power supplies and 60 days to outline integration plans for large-scale users. According to the Electric Power Research Institute, data centers currently account for 5% of U.S. electricity demand, a figure projected to triple by 2035.
While tech companies have welcomed the policy shift, the industry continues to face challenges, including permitting delays, local community opposition, and shortages of critical infrastructure equipment like transformers and gas turbines.