FERC Sets June Action on DOE’s Large Load Interconnection Plan Putting Federal-State Boundaries at the Center of What Comes Next

By Ryan J. Regula

The Federal Energy Regulatory Commission (FERC) has committed to act by the end of June 2026 on the U.S. Department of Energy’s (DOE) Section 403 proposal to standardize how very large electricity users (especially data centers) connect to the interstate transmission grid, roughly two months after DOE’s requested April 30, 2026, date. The extra time signals a deliberate push for a response that is fast enough to meet surging demand yet legally durable, with the line between federal and state jurisdiction emerging as the decisive design constraint. The upshot is straightforward: federal direction is imminent; jurisdictional clarity will shape substance; and projects that are ready on deposits, cost responsibility, and flexible or co‑located configurations will be best placed to move when the Commission acts.

FERC’s Commitment and Why Timing Matters

FERC’s decision to act by June sets a near‑term milestone in a high‑stakes proceeding. The agency has framed its response as quick, efficient, and durable, and it has pointed to recent decisions, most notably the PJM Interconnection (PJM) co‑located load order¹ and the Southwest Power Pool’s (SPP) High Impact Large Load (HILL) framework², as practical building blocks for what comes next. That framing matters because it confirms June will not be a clean‑sheet exercise. The Commission is more likely to translate lessons from these regional precedents into a federal baseline while preserving space for continued innovation through case‑specific filings.

DOE’s October 2025 transmittal used Section 403 of the Department of Energy Organization Act to deliver a draft Advance Notice of Proposed Rulemaking and asked FERC to take final action by April 30, 2026. FERC’s June target, which is about 60 days beyond DOE’s ask, signals both urgency and care. The Commission appears intent on answering DOE’s call while fortifying the legal foundation that any generic standard will need to survive review and integrate cleanly with state authority.

What DOE Proposed and the Legal Frame

DOE urged FERC to standardize procedures for new and hybrid “large loads” greater than 20 MW when they interconnect directly to transmission facilities, adapting open‑access principles from generator interconnection to a transmission‑level load context. Substantively, DOE’s principles include coordinated studies of load and co‑located generation, standardized deposits and readiness screens, expedited studies for curtailable loads, a right to build comparable to generators, and assignment of 100 percent of network‑upgrade costs to the interconnecting large load or hybrid facility.

Legally, DOE advanced a transmission‑only theory grounded in the Federal Power Act’s assignment of authority over interstate transmission and practices directly affecting wholesale rates, while preserving state control over retail service, local distribution, and generation siting. DOE also tied the scope to facilities deemed transmission under FERC’s seven‑factor test, which distinguishes transmission from local distribution. These choices are meant to anchor reforms squarely in FERC’s lane and avoid preemption fights that could delay or dilute outcomes the market needs.

Why Federal–State Boundaries Are the Decisive Design Constraint

The central challenge is jurisdictional. Section 201(b)(1) of the Federal Power Act gives FERC authority over interstate transmission and wholesale sales, while reserving retail sales, local distribution, and siting to the states. Historically, that has meant FERC standardized generator interconnections but did not set generic rules for end‑use load interconnections, which states managed through retail tariffs and distribution planning. DOE’s proposal acknowledges that history, and confines its request to transmission‑level interconnections. FERC’s leaders have signaled they intend to stick to those lines, emphasizing that any June action must be legally durable.

This line‑drawing is not academic. Today’s large‑load projects often straddle the seam between wholesale and retail. Developers are pursuing speed‑to‑power through co‑location with on‑site generation and storage, netting withdrawals when possible, while still seeking firm transmission service. These hybrid configurations raise practical questions about study models, capacity rights, curtailment, and cost allocation that implicate both federal and state domains. Clean boundaries are therefore both the legal predicate and the operational blueprint for a workable national baseline.

States have underscored the point. State commissions have urged FERC to disclaim jurisdiction over distribution‑level interconnections and retail constructs, to avoid any federal action that circumvents state decisions on retail design, and to pursue cooperative federalism that protects retail customers while enabling timely transmission‑level solutions. That is not opposition to reform; it is a call for reforms that respect the statutory architecture and align with active state programs.

What Recent Orders Teach Us: PJM Co‑Location and SPP HILL

FERC’s recent orders show how to manage the seam. In PJM, the Commission found the tariff unjust and unreasonable for lacking clear provisions for large loads co‑located with grid‑connected generation. It directed PJM to create transparent service options and clarify interconnection pathways that protect consumers and curb cost shifting. Subsequent compliance rounds show how granular this work becomes, particularly where the tariff must define what counts as transmission service, how much netting is permissible, and how to adjust generator capacity rights at hybrid sites.

SPP’s HILL framework offers a complementary model. FERC approved a dedicated process for studying large, energy‑intensive loads and a companion pathway for generation intended to serve them. The order grounded acceptance in cost‑causation and reliability, reinforcing that transmission‑level readiness screens, curtailment pathways, and targeted supply additions can be designed to protect the system and customers while moving projects faster. Together, PJM and SPP sketch the contours of a baseline that is transmission‑facing, transparent, and adaptable.

What June Action Could Look Like—and What It Likely Won’t

FERC has not pre-committed to the vehicle. A policy statement, a targeted rule, or a notice of proposed rulemaking are all plausible given the Advance Notice of Proposed Rulemaking (ANOPR) posture and breadth of the record. What the Commission has promised is to address DOE‑identified problems in a legally durable way. That points to a transmission‑only baseline that clarifies cost responsibility, sets standardized readiness and withdrawal guardrails, harmonizes with Order No. 2023 cluster processes, and carves defined channels for flexible or co‑located loads. It does not point to a federal dictate on retail service, distribution interconnections, or siting.

Expect caution on two flashpoints. Thresholds will remain debated: a 20 MW trigger is clear and administrable, but some regions may seek higher thresholds to avoid capturing routine industrial expansions or to deter gaming, while others may ask for elective federal pathways tied to curtailment or co‑location. Cost allocation will remain anchored in cost‑causation, with strong pressure for transparency to protect existing customers from upgrade cost shifts.

Practical Implications for Data Centers, Utilities, and States

For developers and hyperscalers, June means transmission‑level standards could land mid‑cycle for active projects. Teams that arrive with demonstrable site control, standardized deposits, credible load profiles, and clear flexibility options will be first through the gate. Strategies that reduce net withdrawals, such as firm on‑site generation or storage, credible curtailment commitments, or both, are most likely to qualify for expedited study channels if FERC and regions create them.

Budgeting should assume assignment of 100 percent of network‑upgrade costs to the interconnecting large load, with careful attention to how “option to build” rights and protection schemes are specified in each region. Even where net withdrawals are modest, expect transmission providers to model gross conditions for short‑circuit, voltage, and stability to size protections and validate requested rights.

For transmission providers and Regional Transmission Organizations/Independent System Operators (RTOs/ISOs), integration with Order No. 2023’s cluster processes is inevitable. Standardized deposits, viability screens, and withdrawal penalties are likely to be reinforced, along with transparent allocation of upgrade costs within clusters. The Commission has signaled interest in earlier consideration of advanced transmission technologies and non‑wires alternatives that can accelerate “speed to power” at just and reasonable cost, which is an expectation that could surface quickly in compliance guidance and study protocols.

For state commissions and legislators, June should leave intact authority over retail rates, distribution interconnections, and siting. However, it will raise the premium on coordination with transmission providers to align retail service constructs with transmission‑level fast‑tracks, cost‑responsibility rules, and hybrid configurations. Many states are already moving on large‑load tariffs, readiness requirements, and community‑benefit frameworks; FERC’s action will work best as a floor that supports, and does not displace, those efforts.

Bottom Line

FERC’s decision to act by the end of June locks in near‑term federal direction on transmission‑level large‑load interconnections. The strength of that direction will turn on disciplined federal–state line‑drawing. Market participants should plan for a transmission‑only baseline that rewards readiness and flexibility, builds on PJM and SPP precedents, preserves state control over retail and distribution, and keeps cost‑causation front and center. Projects that show their work on net withdrawals, protections, and upgrade avoidance (and that fit cleanly in both the federal transmission lane and the state retail lane) will likely be first through the gate when the Commission’s action arrives.

***Opinions expressed are those of the author and not necessarily the firm’s or their colleagues’.