FERC Orders PJM to Create New Rules for Co‑Located Data Centers and Large Loads
- Jan 8
- 2 min read
Federal Energy Regulatory Commission directs PJM to revise transmission service rules to enable cost‑effective service for co‑located generation and large load facilities.
In January 2026, the Federal Energy Regulatory Commission (FERC) issued an order finding the PJM tariff unjust and unreasonable with respect to transmission services for co‑located large loads and generation facilities. The directive requires PJM to file revised transmission service options that provide clarity on how co‑located loads can contract for service, expand access, and help address interconnection bottlenecks. FERC’s action aims to improve planning and cost allocation for large industrial and data center loads while protecting consumer interests. It also includes a reporting requirement by mid‑January on proposed reforms to speed generation capacity additions and enhance load forecasting.
FERC found PJM’s current tariff provisions for co‑located loads unreasonable and ordered reforms.
PJM must propose transmission service rule changes that clarify cost, terms, and conditions for large co‑located loads.
The order is intended to reduce bottlenecks and accelerate interconnection for new capacity.
PJM is required to report on expedited interconnection and forecast improvements by January 19, 2026.
Revisions aim to balance growth of large loads like data centers with reliability and consumer fairness.
“FERC stated that clarifying new rules will help release the bottleneck of large load investments across the PJM footprint."
CONCLUSION
FERC’s directive signals a shift toward accommodating modern load growth within existing transmission planning and cost structures. By clarifying service rules for co‑located generation and loads, this action could reduce barriers to interconnection and improve financial certainty for large infrastructure investments. This type of regulatory reform helps align transmission planning with evolving demand patterns, making it easier to justify and finance major grid expansions, including long‑distance HVDC corridors that will need clear interconnection frameworks to attract capital and optimize deployment.
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