US federal foreign investment review does not guarantee access to the Texas grid—Texas is free to add its own foreign ownership restrictions beyond those applied at the federal level. On October 16, 2026, the US Court of Appeals for the Fifth Circuit affirmed a district court’s dismissal of a developer’s challenge to the denial of its request to interconnect a solar energy project to the Electric Reliability Council of Texas (ERCOT) grid. The court found that the Committee on Foreign Investment in the United States (CFIUS)—the interagency committee that screens foreign-facing financial transactions for national security and strategic risks—does not preempt the Lone Star Infrastructure Protection Act of 2021 (LSIPA).
Power & Pipes
FERC, CFTC, and State Energy Law Developments
On August 26, US President Trump issued an executive order declaring a national emergency regarding risks associated with foreign-produced equipment used in the US bulk-power system. The order cites potential cyber, remote access, sabotage, and supply disruption risks, noting that growing electricity demand increases the consequences of potential attacks on the electric grid.
On June 18, 2026, the Federal Energy Regulatory Commission (FERC) directed each of the six regional grid operators it regulates (the Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs)) and their member transmission owners to justify or reform the terms of their tariffs related to interconnections for data center and other large energy users (Show Cause Orders).
The North American Electric Reliability Corporation’s (NERC’s) new Reliability Guideline, Risk Mitigation for Emerging Large Loads, provides a detailed framework for addressing reliability risks associated with rapidly growing large loads, including data centers, cryptocurrency mining facilities, hydrogen production facilities, manufacturing facilities, and arc furnaces.
The North American Electric Reliability Corporation (NERC) has issued a Level 3 Alert, the highest possible severity level and one that is rarely used by NERC, requiring the immediate attention of many NERC registered entities. While the Alert is not itself a new Reliability Standard, it directs certain registered entities to assess and report on proposed changes to modeling, studies, protection, and communications practices for large computational loads.
FERC recently approved a stipulation and consent agreement between the Los Angeles Department of Water and Power (LADWP) and Office of Enforcement and Regulatory Accounting to resolve an investigation into potential violations of the North American Electric Reliability Corporation (NERC) Rules of Procedure (ROP) and FERC regulations during a 2020 audit by the Western Electricity Coordinating Council. The settlement, and with it the large monetary penalty and additional compliance obligations, underscores the critical importance of transparency, accuracy, and truthfulness in reliability compliance monitoring and enforcement.
Earlier this year, the Federal Energy Regulatory Commission (FERC or the Commission) issued Order 1977 to address its limited backstop siting authority for electric transmission lines. On October 17, 2024, FERC issued Order 1977-A, adding a new requirement mandating that siting applicants seeking rights of way on Tribal lands must include their Tribal Engagement Plans within their project proposals.
The US Senate Committee on Energy and Natural Resources has advanced the Energy Permitting Reform Act of 2024, a bipartisan energy bill that would facilitate permitting for energy infrastructure and mining projects.
The DC Circuit has affirmed FERC’s application of the “cost causation” principle to prevent a public utility (the Utility) from allocating costs for facilities to customers that did not benefit from the facilities. The Utility had asked the court to overturn FERC’s order preventing the Utility from recovering transmission costs from customers located near the facilities because those facilities were built and intended to serve solely a separate group of customers located 300 miles away.
FERC has issued its final rule paving the way for incentive-based rate treatment for electric utilities that make certain voluntary cybersecurity investments. As we first noted in 2020 when describing the proposed rule, the final rule provides a new mechanism for promoting cybersecurity of the bulk-power system by rewarding utilities for proactively enhancing their cybersecurity programs beyond the mandatory requirements of the North American Electric Reliability Corporation (NERC) Critical Infrastructure Protection (CIP) reliability standards.