Rapidly escalating load growth from data centers, artificial intelligence (AI), and other large power users has pushed the Federal Energy Regulatory Commission (FERC) and the Department of Energy (DOE) to consider sweeping changes to how large-load interconnections are governed. Following DOE’s October 23rd Advance Notice of Proposed Rulemaking (ANOPR), the Trump administration has signaled interest in asserting federal authority over the siting and interconnection of major loads, mirroring the federalized framework already used for generation interconnection. While developers and hyperscale operators see the move as a path to greater predictability and reduced timelines, it has triggered strong reactions from state regulators and raised foundational questions about jurisdiction under the Federal Power Act.
State public utility commissions, speaking during the National Association of Regulatory Utility Commissioners (NARUC) conference, warned that a federally run large-load interconnection regime could weaken state oversight, complicate siting, and undermine the ability of states to align infrastructure with regional realities. Regulators from Oklahoma, Florida, and Virginia emphasized that retail ratemaking authority, reliability planning, and state-specific risk factors—including extreme weather and resource adequacy—cannot be standardized without creating unintended systemic vulnerabilities. NARUC is now debating a formal resolution urging FERC to preserve state retail authority, safeguard reliability, and ensure equitable cost allocation before advancing DOE’s proposal.
FERC Explores Treating Large Loads as “Grid-Shaping” Resources
FERC’s initial framing of the rulemaking aligns with a recognition that large-load projects—especially multi-hundred-megawatt data centers—are increasingly “grid-shaping” resources rather than passive consumers. The rulemaking would likely impact new large power consuming facilities across all industries, potentially imposing interconnection queue processes, transmission planning requirements, or cost-allocation frameworks similar to generator interconnection. The legal community notes that the key determinant will be how FERC defines jurisdictional scope and system impacts—and whether the commission asserts authority over facilities with minimal interstate power transfers.
Underlying this regulatory debate is a dramatic surge in electricity demand. Some state officials—including the Arizona Corporation Commission—argue that the current state-led system is too slow to respond to hyperscale demand growth and poses national competitiveness risks, especially compared with rapid deployment in China. Large-load developers, including Amazon Web Services, echoed these concerns, arguing that a harmonized federal framework may be necessary to meet AI and cloud-driven demand targets.
States Warn Federalization Could Backfire and Slow Development
Still, even state regulators who acknowledge the need for accelerated timelines caution that federalizing the process may fracture essential state–federal partnerships. Leaders from Wyoming and other states warned that assertive jurisdictional preemption could backfire—slowing rather than accelerating development by triggering litigation, delaying siting approvals, and eroding state cooperation on transmission, permitting, and land-use decisions. The emerging consensus among many stakeholders is that FERC must craft a hybrid model that facilitates faster, more coordinated large-load interconnections without sidelining states that control key siting, retail, and economic-development decisions.
FERC will accept comments on the ANOPR through November 21, and energy-sector observers expect a robust, high-stakes rulemaking that could reshape grid planning for the next decade. For developers, hyperscalers, and investors, the outcome will influence not only interconnection timelines but broader capital-deployment strategies, cost-allocation risks, siting dynamics, and long-term grid-infrastructure planning. The rulemaking sits at the intersection of load growth, reliability concerns, and jurisdictional tension—setting up one of the most consequential federal–state power policy debates in years.