On June 18, 2026, the Federal Energy Regulatory Commission (FERC) issued six show cause orders directed at each of the Regional Transmission Organizations and Independent System Operators (RTO/ISOs) and their constituent transmission owners, regarding what FERC views as a package of necessary reforms to better enable large load interconnections. The action came against the backdrop of surging growth in electricity demand driven in part by the rapid proliferation of data centers and manufacturing facilities.
FERC has taken a significant step toward addressing the growing demand for electricity from data centers, advanced manufacturing facilities, and other energy-intensive users, issuing separate show cause orders to each of the six RTOs and ISOs under its jurisdiction, directing them to justify their existing large-load interconnection processes or propose reforms. The orders signal that the Commission believes additional action is needed to accommodate unprecedented load growth while protecting reliability and existing customers.
What FERC ordered and why
FERC issued the orders initiating proceedings under Section 206 of the Federal Power Act. By leveraging its authority under Section 206, FERC contends that certain tariff provisions are unjust and unreasonable and accordingly compels each RTO to modify or add language to fully comply with the Federal Power Act. Each order addresses five common categories of reform, though the specific Commission directives are tailored to each region’s existing tariff provisions.
The action was prompted in part by findings from the North American Electric Reliability Corporation showing that electricity demand growth is higher than at any point in the past two decades, driven in large part by data centers and other large commercial and industrial loads. FERC proposed to define a large load as a commercial or industrial customer located at a single site behind one or more points of interconnection that has a peak load of at least 50 MW, connects to the transmission grid at a voltage of at least 69 kV, and is not part of a co-location arrangement.
Rather than issuing a Notice of Proposed Rulemaking that typically takes a long time to finalize, FERC issued customized show cause orders via Section 206 of the Federal Power Act to each of the six regional grid operators. FERC reasoned that this approach would be faster than a traditional rulemaking and would allow solutions tailored to each region’s specific circumstances, market constructs, and the progress each RTO/ISO has made toward addressing large load integration.
Regional generation adequacy reports due
FERC directed each RTO/ISO to explain how it intends to ensure that adequate generation will be available to serve existing and new large loads. These generation adequacy reports are due by July 20, 2026.
At the June 18 open meeting, Commissioner David Rosner described the orders as organized around four broad pillars: protecting consumers, safeguarding reliability, enhancing transparency, and fostering innovation. Commissioner Rosner’s remarks highlighted the importance of cost recovery agreements to prevent costs associated with large load infrastructure from being shifted to residential customers if a planned large load fails to materialize as expected.
FERC acknowledges that transmission services and tariffs vary significantly across RTOs/ISOs and does not propose to mandate a uniform framework for interconnecting large loads. Chairman Laura V. Swett noted during the open meeting that FERC will leave the generic RM26-4 proceeding open to potentially address non-RTO utilities in the future.
Background: DOE directive and rulemaking record
On October 23, 2025, Secretary of Energy Chris Wright directed FERC to initiate rulemaking procedures regarding the interconnection of large loads pursuant to his authority under Section 403 of the Department of Energy Organization Act. The resulting orders are informed by the record developed in response to that ANOPR and by innovative proposals that stakeholders filed with the Commission under FPA Section 205. FERC subsequently opened a rulemaking docket, accumulating an administrative record of over 3,500 pages of comments from nearly 175 industry stakeholders and interested parties.
After considering those public comments, the Commission opted for the targeted show cause orders, finding that traditional rulemaking would be slower and less responsive to regional variation. FERC sets out interconnection process requirements, including a requirement for the RTOs and transmission owners to consider alternative transmission technologies and, if not used, explain why not, per FERC’s large load interconnection docket.
The broader context is one of intensifying pressure on an already constrained transmission network. The DOE’s Office of Electricity has separately reported to Congress that EV charging will have significant implications for the grid, noting that EVs have flexibility in how and when they charge and may sit idle for long periods.
Meeting growing energy demand from EV charging will require investments in infrastructure and approaches that take advantage of demand and supply flexibility.
The prospect of millions of EVs connecting alongside data centers and industrial loads makes the question of who pays for grid upgrades, and on what timeline, increasingly urgent. GCN has previously reported on how U.S. battery storage is on track to reach 67 gigawatts by early 2027, a resource that could help balance exactly these kinds of new loads.
What comes next
FERC requires responses to the show cause orders by August 17, 2026, which will be a challenging deadline to meet for RTOs/ISOs that need buy-in for reforms from stakeholders through governance processes already embedded in their tariffs. All five members of the Federal Energy Regulatory Commission appeared before the Senate Committee on Energy and Natural Resources on July 22 for an oversight hearing dominated by the commission’s June show cause orders, underscoring the broad urgency behind the action.
The battleground now moves to regional stakeholder processes, where critical issues will be addressed. These include whether regions elect to file their own solutions, how they define large load and flexible large load, and what minimum cost-recovery and financial security requirements they propose.
Those regional filings will set terms under which large electricity consumers gain access to the U.S. transmission grid. The Commission encourages RTOs/ISOs to adopt pro forma agreements that would require eligible customers serving large loads to make a minimum financial commitment toward necessary upgrades in the event that the large load does not materialize or takes less service than initially contemplated, to address the risk of stranded costs. How utilities share those costs with existing ratepayers, a central concern flagged in the show cause orders, remains unresolved.
GCN has tracked how neighborhood EV chargers are already straining distribution hardware, a lower-voltage version of the same capacity problem now playing out at the bulk transmission level.
