The Federal Energy Regulatory Commission (FERC) has directed PJM Interconnection to develop rules allowing data centers and other large loads to colocate at power plants. The order, seen as a win for gas-fired and nuclear plant owners, aims to balance supporting large energy consumers—like AI data centers—while protecting electricity affordability and system reliability. FERC requires PJM to create three new transmission service options, revise behind-the-meter generation rules, and report on interconnection proposals by January 19, according to Ethan Howland of The Utility Dive. The decision provides regulatory clarity for large load customers but does not address retail load jurisdiction, leaving broader challenges of reliably integrating large loads to states, industry, and FERC. Howard writes:
The Federal Energy Regulatory Commission on Thursday ordered the PJM Interconnection to develop rules for colocating data centers and other large loads at power plants.
The decision is a “major victory” for companies that own gas-fired and nuclear power plants in PJM, according to analysts with Capstone, a research firm. Some of those companies include Constellation Energy, Public Service Enterprise Group and Vistra. […]
FERC’s order is a “first step in a process that will require quick action and durable consensus from many stakeholders and highlights the urgency in getting solutions onto the system,” Electric Power Supply Association President and CEO Todd Snitchler said in a statement.
The decision could lead to regulatory certainty for large load customers and safeguards to make sure that colocating loads won’t drive up electric rates for other ratepayers or hurt system reliability, according to Advanced Energy United, a clean energy trade group. […]
To address concerns about power supply in PJM, FERC gave the grid operator until Jan. 19 to file a report on the status of proposals PJM considered in its Critical Issue Fast Path stakeholder process on integrating large loads, including the status of the grid operator’s expedited interconnection process for shovel-ready generation projects. […]
Chang emphasized the limits of FERC’s decision, noting that the colocation model the order envisions may not work in states where the local electric utility must serve retail loads.
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