The Federal Energy Regulatory Commission will release guidance on how data centers connect to the power grid by the end of June, the agency confirmed this week. The move comes as a surge in large-scale computing facilities strains transmission systems and raises questions about who pays for upgrades.
Why the guidance is coming now
Data centers have been expanding rapidly — driven by cloud computing, streaming, and the boom in AI training. That growth is pushing local grids to capacity in areas like Northern Virginia, where more than a dozen new facilities are planned. Utilities and grid operators have been asking FERC for clearer rules on interconnection queues, cost allocation, and reliability standards. Without a federal framework, disputes over who foots the bill for new substations and transmission lines have dragged on for years.
The guidance is expected to address how data centers should be treated under FERC's Open Access Transmission Tariff and whether they can be classified as a distinct load type. That classification matters because it affects how costs for grid upgrades are split among all users on a system.
What the guidance likely covers
Sources familiar with the commission's thinking say the document will likely include recommended time frames for interconnection studies, minimum technical requirements for on-site backup generation, and rules for how data centers can sell excess power back to the grid. The guidance is not a binding rule, but it will carry weight in FERC-jurisdictional proceedings and in state-level utility commission cases.
One unresolved question is whether the guidance will address the use of behind-the-meter natural gas or battery storage. Data center developers have been pushing for more flexibility in how they manage their own power supply, especially during peak demand periods.
Who stands to be affected
The biggest impact will be on large tech companies that build their own data centers — think hyperscale operators — and on the utilities that serve them. Smaller co-location providers and regional transmission organizations will also be watching closely. If FERC sets clear interconnection timelines, it could shorten project development cycles by months. That would be a win for companies racing to bring new capacity online.
But the guidance could also impose stricter reliability requirements, which would raise costs. Environmental groups have been asking FERC to consider the carbon footprint of backup generators, and some expect the guidance to include a recommendation for emissions monitoring.
Timeline and next steps
FERC staff have been working on the document since late last year. The commission is expected to vote on the final version at its June meeting, with publication shortly after. Once issued, the guidance will open a 60-day comment period. Industry stakeholders — utilities, data center developers, and consumer advocates — will then have a chance to weigh in before FERC decides whether to turn the guidance into a formal rulemaking.
The end-of-June deadline means the commission will have to move fast. Any delays could push the guidance into the fall, when a busy docket of transmission rate cases and reliability orders could crowd it out.
