- FERC approved orders to pressure grids to handle hyperscalers’ connection requests within 90 days, and is requiring data centers to pay for their own power and be flexible with electricity consumption.
- Utilities must now disclose the cost of adding major new consumers to the grid, and grids covering almost two thirds of the US population must submit reports to FERC within 30 days to ensure enough power to meet data center demand.
- FERC’s new approach is described as interventionist and unprecedented, with Chairman Laura Swett stating that the regulator will vigorously protect Americans and is aware of the economic benefit of data centers to the country.
The chairman of the US Federal Energy Regulatory Commission said moves to help AI data centers accelerate hook ups to the country’s electric grids reflect a new and more interventionist approach by the regulator.
FERC on Thursday approved a series of orders to pressure grids to handle hyperscalers’ connection requests within 90 days. The current process can take years.
The commission also said it’s requiring data centers to pay for their own power, and to be flexible with the amount of electricity that they consume. And utilities must now disclose the cost of adding major new consumers to the grid.
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“The way that our electric grid is now, with the generation that we have today, it is not going to work,” Laura Swett, FERC’s chairman, said in an interview with Bloomberg TV. “We have to be aggressive. We have to look at everything with fresh eyes and make interventionist and unprecedented action.”
Under Swett’s leadership, FERC is undergoing a sharp pivot. Formed in the late 1970s in response to that decade’s oil crisis, the regulator had developed a reputation as a sleepy steward of interstate electricity and natural gas markets. It also monitors prices for the transport of oil products by pipeline and approves natural gas projects.
FERC’s new posture comes as the Trump administration prioritizes AI as a key driver of American economic growth and a major factor in its geopolitical ambitions.
It’s also happening as electric demand spikes in the US — and after surging utility bills became a political lightning rod. Data centers are key contributors to both trends.
Under the moves FERC approved Thursday, grids that cover almost two thirds of the US population will need to submit reports to FERC within 30 days that ensure there’s enough power to meet data center demand. In less than 60 days, they’ll also have to justify why their existing pricing structures can accommodate new facilities, or propose changes.
“We are getting out of the doom loop,” said Arushi Sharma Frank, founder of Washington, D.C.-based venture studio Luminary Strategies LLC. “This is a first of its kind accountability framework for data centers.”
Under Swett, FERC has also been pressuring PJM Interconnection LLC, the largest grid in the US, to reform itself or face the risk of break up. PJM has been criticized for a slow response to the data center boom. A key conference to debate reforms is scheduled for next month.
“We are going to vigorously protect Americans more than we ever have before,” Swett said. “For the first time, the electric regulator in this country is very aware of the economic benefit that we may give to our country because data centers are the intersection of not just energy, but also national security and jobs.”
— With assistance from Ari Natter
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