New Curtailable Service Would Accelerate Large-Load Connections
New Curtailable Service Would Accelerate Large-Load ConnectionsThe California Independent System Operator (CAISO) Board of Governors has approved a proposal to establish a new process for connecting large electricity users, including data centers, to the grid while necessary transmission upgrades are still pending. The proposal, approved Oct. 28, is CAISO’s response to a June directive from the Federal Energy Regulatory Commission (FERC) requiring all six U.S. regional grid operators to review and justify their existing large-load interconnection procedures. CAISO plans to submit its proposal to FERC by the Nov. 16 deadline.
Flexible Interim Service Offers a Path to Faster Energization
A central component of the proposal is the Flexible Interim Load Interconnection (FILI) process, which would allow qualifying large loads to begin receiving electricity before all required grid improvements are completed. In exchange for earlier service, participating customers would agree to have their electricity service curtailed when necessary to protect system reliability. The process would apply to customers with peak loads of at least 50 MW connected to the CAISO-controlled grid. CAISO expects these arrangements to be tailored to individual projects based on their location and transmission constraints, with contractual agreements established through the participating transmission owner. The longer-term objective is to transition customers from interim flexible service to firm interconnection service as grid upgrades are completed.
Cost Allocation and Generation Colocation Remain Key Priorities
CAISO also emphasized that accommodating new large loads must not shift the costs of their interconnections onto existing utility customers or other market participants. The proposal seeks to clarify how existing transmission access charges should be implemented to prevent unreasonable cost shifting among participating transmission owners and their customer bases. In addition, CAISO plans to explore opportunities for colocating large loads and new generation at the same site, as well as developing a process to evaluate serving large customers with electrically proximate generating resources. These approaches could provide additional flexibility for data centers and other energy-intensive facilities while helping manage the infrastructure requirements associated with their growth.
Additional Stakeholder Efforts Expected in 2027
Beyond its immediate FERC filing, CAISO expects to launch a stakeholder initiative in the first half of 2027 to examine whether flexible interconnection options could become a more permanent feature of its large-load connection framework. The broader effort reflects growing pressure on grid operators to accommodate rapidly expanding electricity demand without compromising reliability or requiring existing customers to absorb the associated infrastructure costs. Unlike some other regions experiencing substantial data center-driven demand growth, CAISO indicated that its current resource portfolio remains sufficient to meet reliability targets and that data center growth in its territory has been comparatively moderate. Nevertheless, the proposed framework positions California to accommodate future large-load development while balancing the need for faster connections, system reliability and responsible cost allocation.