Actionable Intelligence: Insights on FERC ANOPR Response
Deep Dive on FERC’s ANOPR Response, Readout on Affordability Roundtable, and a Transmission Pricing White Paper
Welcome back to Actionable Intelligence, COEFFICIENT’s newsletter on the latest developments in energy, electricity, technology, and climate policy. This edition provides a readout of our recent Michigan Affordability Roundtable, a deep dive into FERC’s June 18 orders to RTOs in response to DOE’s ANOPR, and an overview of new policy options for ensuring transmission investment supports reliability without imposing unnecessary costs on consumers.
In This Issue…
Readout: Michigan Customer Affordability Roundtable
Deep Dive: Federal Energy Regulatory Commission’s June 18th Orders to the six RTOs in response to DOE’s ANOPR
New White Paper: Federal Transmission Pricing in an Era of Load Growth
Congressional Hearings to Note
Readout: Michigan Customer Affordability Roundtable
The Electricity Customer Alliance convened a roundtable in Lansing, Michigan on June 11, bringing together regulators, large energy users, policymakers, and customer advocates to discuss the growing challenge of rising electricity costs. Participants included U.S. DOE Associate Deputy Secretary Alex Fitzsimmons, Michigan Public Service Commission Chair Dan Scripps, General Motors’ Rob Threlkeld, ABATE Energy’s Michael Patwell, and Michigan State University’s Dr. Erik Nordman.
The discussion focused on the affordability pressures facing Michigan households, businesses, and manufacturers as electricity demand continues to grow from new industrial development, AI infrastructure, and electrification. A recurring theme throughout the conversation was the need to keep customer affordability at the center of energy policy decisions. Panelists discussed opportunities to improve transparency around utility spending, strengthen oversight of large-scale investments, and ensure that the costs associated with new load growth are allocated fairly. Federal perspectives highlighted ongoing efforts to protect ratepayers and prevent existing customers from bearing disproportionate costs as demand expands. The event underscored growing interest among policymakers and stakeholders in developing practical, customer-focused solutions that maintain reliability while addressing affordability concerns.
Deep Dive: Federal Energy Regulatory Commission’s June 18th Orders to the six RTOs in response to DOE’s ANOPR
Last Thursday, the Federal Energy Regulatory Commission (FERC) took major new steps to clarify and accelerate interconnection processes for new large load customers like data centers and industrial and manufacturing facilities while protecting existing customers from rate increases. FERC issued six new orders—each directed at one of the six FERC-regulated Regional Transmission Organizations/Independent System Operators (RTOs/ISOs)—that require the initiation and implementation of reforms to interconnection rules and transmission service offerings to provide clear roadmaps for how large customer requests to interconnect are studied, put in place safeguards against cost shifts to other customers, and accommodate co-location of large loads with generation, use of behind-the-meter generation, and large load customer flexibility.
The orders represent FERC’s long-awaited response to the Secretary of Energy’ s October 2025 Advanced Notice of Proposed Rulemaking (ANOPR), which itself proposed a series of principles for large load interconnection that should be adopted nationwide. Rather than adopt nationwide reforms through a rulemaking, FERC instead chose a tailored approach requiring each of the six RTOs/ISOs to individually reform their rules and procedures to comply on a faster timeframe.
Thursday’s orders kick off an intense regulatory process that will play out over the next several months at each RTO/ISO, at FERC, and in state capitals.
What did FERC do?
FERC issued a series of what are called “show cause” orders under Section 206 of the Federal Power Act (FPA), which gives FERC the authority to investigate the existing rates and practices of utilities subject to its jurisdiction (including RTOs/ISOs) and, if found unjust and unreasonable, to order that new rates and practices be established in their place. Through these orders, FERC is requiring the RTOs/ISOs to closely examine their existing market rules and interconnection policies and procedures to determine whether they efficiently and reliably integrate large load customers, and if not, to develop and implement reforms on an expediated basis.
FERC’s orders specify that RTOs/ISOs must have in place frameworks for interconnecting and integrating large load customers that address five core sets of requirements (which FERC calls “categories of reforms”):
Each RTO/ISO must establish clear transmission service application study rules for large loads. FERC preliminarily defines large loads to include those over 50 MW, located at a single site (behind one or more points of interconnection), that interconnects to the transmission system at a voltage level higher than 69 kV. FERC states that these rules must include an application process that accepts applications for transmission service on a rolling basis, non-refundable application fees, readiness requirements (such as milestones or deposits), and data disclosures to guard against duplicative or speculative interconnection requests, as well as clear and consistent provisions to study operational and reliability risks stemming from the unique operational characteristics of large loads (including recent events highlighted by NERC, the nation’s reliability watchdog). Operational reliability requirements, including requirements for customers to provide operating data and install monitoring and communications equipment and provisions enabling an RTO/ISO to remotely disconnect large loads, where necessary, must be incorporated in pro forma transmission service contracts. FERC also says study processes should take no more than 60-90 days to complete.
Notably, FERC also requires that large load study procedures study, evaluate, and report on the ability to use advanced transmission technologies to satisfy large load transmission service needs. RTO/ISOs are required to evaluate use of these technologies (which include advanced conductors, dynamic line ratings, and other software and hardware solutions) without the customer requesting that it do so, and to issue a detailed study report if traditional technologies are chosen instead.
To guard against the potential for costs to serve new large loads to be inappropriately shifted to other customers, FERC states that RTOs/ISOs must put adequate safeguards in place, including new cost recovery agreements with minimum financial contributions and financial security provisions to ensure new large loads timely pay the costs of transmission facilities needed to serve them. In addition, to ensure that states can allocate the costs of large load-driven transmission projects to large load customers, FERC requires RTOs/ISOs to provide what it says is “unprecedented” enhanced transparency of transmission upgrade costs incurred to serve new large loads.
RTOs/ISOs are also directed to establish clear rules to guide co-location of large loads with new generation and use of behind-the-meter generation to serve large loads. FERC says these rules should include procedures for how customers using co-located or behind-the-meter generation can request transmission service at a level below the output of the generation resource to recognize that part of its output is dedicated to serving the large load. Importantly, FERC preliminarily finds that all RTOs/ISOs should adopt the same new transmission services that it ordered PJM Interconnection, L.L.C. to develop last year. FERC also states that customers using co-located or behind-the-meter generation should share fully (on a gross, rather than net, consumption basis) in certain grid costs (namely ancillary services like frequency regulation and black start).
With respect to large load flexibility—i.e., the ability of a large load customer to adjust grid consumption or other take steps to alleviate grid strain or reduce the need for new infrastructure—FERC concludes that new transmission services must be available to reflect the fact that large loads may use the system differently and that certain large loads are willing and able to limit their use of transmission under certain circumstances. In this regard, FERC repeats its preliminary finding that all RTOs/ISOs should be required to adopt certain transmission services it ordered PJM to develop last year.
Finally, FERC requires RTOs/ISOs to develop pathways for large load customers to bring their own new generation by requiring them to study new generation and large load interconnections together in cases where the customer intends to be served by a new generation resource that is “electrically proximate” to its facility. This study process must allow the new generator to commit to limit its output to match the consumption of the large load to minimize impact on the broader transmission grid. FERC says this new study procedure is needed to avoid costly transmission network upgrades that existing generator interconnection processes would otherwise trigger for the customer’s proposed generation resource. FERC points to the Southwest Power Pool’s High-Impact Large Load Generation Assessment process as a model but stops short of making a finding that this approach should be adopted in all RTOs/ISOs.
What happens next?
FERC’s orders set several upcoming deadlines:
Each RTO/ISO must respond to FERC within 60 days (Monday, August 17). In their responses, the RTOs/ISOs must either explain why their current rules and procedures remain just and reasonable without making the change FERC discusses in the order, or what specific changes to their rules and procedures would best address the five categories of reforms.
Interested members of the public may submit comments on the RTO/ISO responses within 30 days of the date they are filed (likely to land on Wednesday, September 16). This is the first opportunity for customers, solution providers, and other stakeholders to provide FERC with input on the actions it should require RTOs/ISOs to take on the five categories of reform identified.
RTOs/ISOs may also request an abeyance from the requirements of FERC’s order directed to them within 45 days (Monday, August 3). FERC states that it will consider an abeyance, of up to 90 additional days, to allow an RTO/ISO to work through their stakeholder processes to develop proactive filings (under Section 205 of the Federal Power Act) to address the issues raised in the order. Abeyance requests must have a “robust description” of the content of a future filing, and a “reasoned and specific” explanation of when the filing will be made.
FERC also required RTOs/ISOs to submit informational reports within 30 days (Monday, July 20) explaining how they intend to ensure that adequate generation will be available to serve existing and new large loads, including a description of any stakeholder discussions ongoing regarding the RTO/ISO’s resource adequacy processes and markets.
What are the implications of FERC’s actions?
FERC’s orders appear to deftly thread the needle between the needs of large load customers (especially fast emerging data centers) for better defined pathways to faster grid interconnection and speed to power, on the one hand, and growing public concerns about the potential for large load growth to increase electricity costs for everyone else on the other. As a result, they’ve received almost universal praise from across the political spectrum thus far. FERC also carefully balanced state concerns that its response to the ANOPR would intrude on their authority, drawing clear jurisdictional lines requested by state regulators and prioritizing additional transparency they need to allocate large load-driven transmission costs to those customers via large load tariffs and contracts.
That said, FERC’s directives in each category of reform remain relatively broad, leaving the RTOs/ISOs with significant latitude in how they interpret and propose to implement them. Each RTO/ISO will initiate resource-intensive stakeholder processes to develop these implementation details, creating challenges for large load customers and solutions providers to track and influence their outcomes.
Those outcomes will, however, have important implications not just for new large load customers like data centers and advanced manufacturing facilities, but also for the growing supply chains serving them. For example, how RTOs/ISOs and FERC ultimately craft operational reliability requirements will impact not just data center operators but also suppliers of control systems, communications infrastructure, and cooling equipment, to name just a few. The ultimate implementation of reforms to support use of co-location arrangements and behind-the-meter generation will determine new market opportunities for suppliers of co-located, on-site, and flexible power solutions to large loads, while the details of transmission service reforms to accommodate large load flexibility will have implications for Artificial Intelligence (AI) and software providers developing flexibility tools and solutions. How RTOs/ISOs execute FERC’s requirement that they proactively examine use of advanced transmission technologies will have obvious impacts on the scope of market opportunity created for grid efficiency software providers and advanced conductor manufacturers.
Given FERC’s interpretation of the limits of its jurisdiction, the announced reforms to develop clear roadmaps for large load interconnection and protect existing customers will largely be utilized by load-serving utilities who obtain transmission service on behalf of new large loads that they serve. However, “unbundled” retail customers who are permitted under state law to obtain transmission service and wholesale power supply from third parties can also take advantage of these reforms. These customers may ultimately find they have the clearest path to interconnection under these reforms, since they will not have the potential commercial friction and delay of a load-serving entity acting as their proxy.
Finally, it should be noted that FERC’s actions apply only to RTOs/ISOs at this time, leaving the remainder of the country (primarily the Southeast and West) with the status quo. RTOs/ISOs serve two-thirds of the nation’s electricity customers, so the impact of FERC’s orders will be extensive. Nonetheless, FERC may soon be called upon to extend its announced reforms to non-RTO/ISO transmission utilities, where large load customers face similar uncertainty with regard to the pathways for interconnection, and where existing customers face the same concerns regarding potential cost shifting risks and the transparency of large load-driven transmission costs.
New White Paper: Federal Transmission Pricing in an Era of Load Growth
The Electricity Customer Alliance, in partnership with Grid Strategies and Americans for a Clean Energy Grid (ACEG), has released Federal Transmission Pricing Volume 2: Options for Ensuring Affordability and Reliability in an Era of High Load Growth. The white paper examines how regulators, grid operators, utilities, and policymakers can address growing transmission investment needs as electricity demand increases from data centers, advanced manufacturing, and other large loads. The report explores policy options to improve transparency, strengthen coordination between state and federal regulators, align costs with beneficiaries, and protect existing customers from unfair cost shifts while maintaining reliability and supporting economic growth.
Congressional Hearings to Note
House Natural Resources Committee Hearing (Energy and Mineral Resources Subcommittee)
Title: Beneath the Surface: Earth MRI and America’s Resource Potential
Date: Thursday, June 25– 10:00 am ET
Witnesses: TBA
House Energy and Commerce Committee Markup (Energy Subcommittee)
Title: Markup of Eight Bills on Electricity and Pipeline Safety
Date: Wednesday, June 24 – 2:00 pm ET
Items to be Considered:
H.R. 9332, Load Forecasting Enhancement Act (Reps. Balderson and Menendez)
H.R. 9339, Affordable Innovation for the Grid Act (Rep. Harshbarger and Mullin)
H.R. 9335, Advanced Transmission to Reduce Rates Act (Rep. Goldman)
H.R. 9340, Ratepayer Protection Act (Reps. Evans (CO) and Castor)
H.R. 6633, High-Capacity Grid Act (Rep. Fedorchak)
H.R. 6529, Protecting Families from AI Data Center Energy Costs Act (Rep. Landsman)
H.R. 2986, Expediting Generator Interconnection Procedures Act of 2025 (Rep. Castor)
H.R. 9338, Pipeline Safety Authorization Act of 2026 (Rep. Weber)