Administration Tees Up Major Expansion Of FERC Jurisdiction Over Large-Load Interconnections

On October 23, 2025, Department of Energy ("DOE") Secretary Chris Wright sent a letter to the Federal Energy Regulatory Commission ("FERC" or "Commission") directing it to initiate a rulemaking to accelerate the interconnection of large loads (>20 megawatts) to the transmission system. The letter cites the urgent need to support AI data center and manufacturing demand, requiring "extraordinary quantities of electricity and substantial investment in the Nation's interstate transmission system."

Along with the letter, DOE included an Advance Notice of Proposed Rulemaking ("ANOPR") directing FERC to initiate rulemaking procedures under seldom-used authority in section 403 of the Department of Energy Organization Act. The ANOPR outlines legal justifications for FERC's authority over large-load interconnections and articulates 14 principles to guide the Commission's rulemaking. Secretary Wright requested that FERC take "final action" on the rulemaking by April 30, 2026—which, if it holds, would be an extraordinarily short timeline for a FERC rulemaking.

Why It Matters

Under DOE's proposed approach, which is clearly inspired by FERC's earlier generator interconnection rulemakings, large-load interconnections (except in Texas) would be subject to standardized procedures and agreements subject to FERC jurisdiction. Although FERC has not historically asserted jurisdiction over most load interconnection, as highlighted in the letter and ANOPR, Secretary Wright asserts that the "interconnection of large loads directly to the interstate transmission system to access the transmission system and the electricity transmitted over it falls squarely within the Commission's jurisdiction." This development could mark a substantial expansion of FERC's open-access framework, extending interconnection standards—historically limited to generation—to large-load facilities such as data centers, industrial manufacturing sites, and electrification hubs. This development is also significant because a number of states have already begun investigating or implementing reforms related to large-load interconnections and their associated cost implications. It seems highly likely that if FERC ends up adopting standardized procedures of the type envisioned by DOE, legal challenges to the scope of FERC's authority and jurisdiction will follow.

Legal Authority

In the ANOPR, DOE outlines the statutory basis for FERC's jurisdiction over large-load interconnections under the Federal Power Act ("FPA") and related precedent. DOE asserts that FERC's authority to regulate transmission in interstate commerce extends not only to generation interconnections but also to load interconnections that involve the use of jurisdictional transmission facilities. DOE outlines four justifications for FERC's jurisdiction:

1. Large loads are a critical component of open access transmission service—requiring minimum terms and conditions to ensure non-discriminatory transmission service.
2. The interconnection of large loads is a practice that directly affects jurisdictional wholesale rates, and the FPA vested FERC with exclusive authority to ensure that rates are just and reasonable.
3. The ANOPR does not impinge on states' authority over retail electricity sales and does not impact any authority traditionally reserved to the states.
4. Any contrary view conflicts with the FPA's core purpose given FERC's jurisdiction over transmission and all facilities for the transmission or sale of energy at wholesale in interstate commerce.

Key Elements of DOE's ANOPR

DOE proposes that any FERC rule should be guided by 14 core principles to ensure transparency, reliability, and consistency across transmission providers. These principles include:

• Jurisdictional Scope. Applies to transmission-level interconnections under FERC's jurisdiction and excludes generation facilities and distribution-level and retail-only facilities, preserving the federal-state jurisdictional boundary.
• Applicability Threshold. The reforms should only apply to new loads greater than 20 megawatts, and for hybrid facilities, where the load is greater than 20 megawatts, though the ANOPR invites comment on whether this threshold should be higher or lower based on regional system size, reliability needs, and administrative burden.
• Study Deposits and Readiness Requirements. Mirroring the generation interconnection process, large-load customers would provide study deposits, demonstrate project readiness, and be subject to withdrawal penalties to discourage speculative requests.
• Hybrid Facilities. For co-located generation and load facilities, studies should account for both injection and withdrawal capabilities. This incentivizes co-location with new generation facilities and ensures efficient buildout of the transmission system.
• Cost Responsibility. Large-load customers would be responsible for 100% of network upgrade costs assigned to their request, though FERC could consider whether such costs should be offset through a crediting mechanism over a period of time.

What Happens Next

On October 27, 2025, FERC issued a Notice Inviting Comments in Docket No. RM26-4-000 (Interconnection of Large Loads to the Interstate Transmission System). Comments are due November 14, 2025, and reply comments are due November 28, 2025.

This proceeding is expected to draw significant stakeholder attention from across the energy industry, given the broad scope of potential impacts and the legal questions surrounding federal versus state jurisdiction. While the DOE requested that FERC take "final action" by April 30, 2026, it remains uncertain whether the Commission can meet that timeline given the procedural requirements of its rulemaking process and the complexity of the issues involved.

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