The expansion of energy-intensive technologies, including artificial intelligence (AI) data centers, has placed unprecedented demands on the electricity grid. These large loads often require vast sums of firm energy and seek to come online quickly, presenting challenges on capacity-constrained portions of the grid. The rapid pace of development is testing the limits of legacy regulatory frameworks, forcing policymakers to retrofit rules originally crafted for a far more predictable and conventional grid. What has emerged is a patchwork of regulatory solutions—large load tariffs, bespoke special contracts, and interconnection agreements—that leave open important questions about rate impacts and reliability.
Amid these questions, the US Department of Energy (DOE) is proposing to streamline how large loads are interconnected to the grid. In a rare move on October 23, 2025, the DOE exercised seldom-used authority to issue an advance notice of proposed rulemaking (ANOPR). The ANOPR instructs the Federal Energy Regulatory Commission (FERC) to launch a rulemaking focused on the timely and orderly interconnection of large loads, including AI data centers.
FERC is currently seeking comments on the ANOPR and extended the deadline for initial comments to November 21, 2025.
While the ANOPR offers broad principles, it leaves open critical questions around execution and jurisdiction. With states and grid operators advancing their own approaches, the interplay between these competing initiatives could redefine how the grid manages data center growth.
DOE ANOPR
The DOE ANOPR intends to spur the development of reforms to more “timely” interconnect large loads, generally defined as those greater than 20 MW, to the transmission grid. Citing the growing demand for electricity driven by domestic manufacturing and AI innovation, the ANOPR directs FERC to evaluate standardized procedures similar to those for large generators to cover large load interconnections, including instances where the large load shares a point of interconnection with new or existing generation facilities (i.e., “hybrid” facilities).
The DOE emphasized the need for FERC to assert jurisdiction over these interconnections, which the DOE likened to transmission service and other wholesale activities that fall squarely within FERC’s purview.
The ANOPR outlines a series of 14 principles that the DOE believes should guide FERC’s rulemaking efforts to ensure efficient, timely, and non-discriminatory load interconnections. The key topics covered by the DOE’s proposals include the following:
- Standardization: The ANOPR concludes that, to the extent practicable, load and hybrid facilities should be studied together with generating facilities and be subject to study processes, including standardized deposits and withdrawal penalties that exist today to deter speculative generation projects.
- Incentives: The ANOPR proposes fast-tracking interconnection for large loads and hybrid facilities that can be curtailed or dispatched by the system operator. By allowing operators to directly control these facilities, the DOE aims to integrate them more quickly and reliably into grid operations and planning. The ANOPR raises questions on how best to structure such an expedited process—potentially through a dedicated, 60-day study track—and how to balance speed with system reliability. The ANOPR also identifies co-location of load with new generation facilities as a potential benefit that may help boost transmission system buildout. It therefore recommends that hybrid facilities be studied based on the amount of total injection and/or withdrawal rights requested.
- Costs: Large load interconnections have generated some concerns over the direct and indirect costs of related grid upgrades. As under the current processes for interconnecting generating facilities, the ANOPR proposes that load and hybrid facilities pay for 100% of the network upgrade costs they are assigned through interconnection studies, which could be offset through a crediting mechanism.
- Reliability and Operations: Several of the ANOPR’s principles are focused on reliability and operational standards. For example, the ANOPR proposes that hybrid facility interconnections install system protection facilities to prevent unauthorized injections or withdrawals. It also concludes that utilities should be responsible for ancillary services for large loads and meet all applicable NERC reliability standards. It also recommends that NERC review its reliability standards to determine if expansions to NERC’s regulatory framework are warranted, potentially through establishing large loads as a separate regulated registration category.
Impact on Other State and Federal Reforms
While the ANOPR intends to standardize issues that have not yet been addressed by FERC, it also raises questions about overlaps with other existing or pending regulatory processes at the state and federal levels.
At the federal level, grid operators confronting the challenge of large load interconnections have sought their own regional solutions. The Southwest Power Pool Inc. (SPP) recently proposed revisions to its FERC tariff aimed at streamlining SPP’s regional transmission planning and generation interconnection processes. SPP stated that the proposal is designed to address the challenges of increasing electricity demand from data centers and other energy-intensive technologies and the need for timely interconnection of new generation resources through a holistic assessment to benefit both load and interconnection customers.
Similarly, PJM Interconnection LLC, the nation’s largest grid operator, which has been grappling with capacity constraints and load interconnection issues, is evaluating reforms under its accelerated Critical Issue Fast Path process to ensure that large loads can be integrated rapidly and reliably, without causing resource inadequacy or other reliability issues. Other regions are considering similar reforms.
States, too, have moved to address the challenge of large load interconnections. Various state policymakers and retail distribution utilities have used innovative frameworks to manage the infrastructure costs and rates for data centers in their service territories. These solutions have included “special service” contracts designed for individual large load customers, specialized large load tariffs, and legislation, like Senate Bill 6 that was enacted in Texas, that aim to standardize large load interconnection and manage the interaction of co-located generation with the grid.
Even though the DOE ANOPR’s proposals are limited to transmission-level interconnections, any overarching federal proposal is likely to have ripple effects on state policies given the increasingly blurred lines between federal and state jurisdiction on today’s grid.
Next Steps
The ANOPR is sure to generate significant interest from the energy and digital infrastructure industries. In addition to addressing the jurisdictional questions presented by the ANOPR, FERC will need to define key terms (e.g., what constitutes a “hybrid” facility?) and eligibility thresholds and balance speed with reliability and cost concerns raised by industry stakeholders.
The DOE set a deadline for FERC to take final action on the ANOPR by April 30, 2026. Although FERC is not required to see a formal rulemaking through to its completion, it is likely to take some action given the urgency the DOE has placed on addressing the interconnection of large loads.
Before taking action, FERC will review public comments. Following requests from industry stakeholders, FERC extended the initial comment deadline to November 21, 2025, with reply comments due by December 5, 2025.