FERC Issues Six Tailored “Show Cause” Orders to Accelerate Large Load Interconnection
On June 18, 2026, against the backdrop of skyrocketing growth in demand for electricity, due in part to the rapid proliferation of data centers, the Federal Energy Regulatory Commission (FERC or the Commission) issued six “show cause” orders under Section 206 of the Federal Power Act (FPA), directing each of the six Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) under its jurisdiction, and the transmission owners within them, to justify or reform their rules governing how data centers, manufacturing facilities, and other large energy users connect to the electric grid.
While the orders do not change any tariff, prescribe rules that the RTOs/ISOs must adopt, impose immediate obligations on individual customers, or apply to areas of the country not governed by those RTOs/ISOs, they represent significant federal action to “expedite the integration of large loads onto the transmission system, providing the speed to power that is critical to supporting the innovation economy, lead the global AI race, and reshore manufacturing jobs to the United States.”[1] They also take steps to safeguard consumers from cost shifting and start a fast-moving compliance clock. The landmark orders, according to FERC, “[w]ill affect 200 million Americans in over 30 states and the District of Columbia” and “[c]over nearly two-thirds of electricity load served pursuant to Commission-jurisdictional rates.”[2]
Below we summarize what FERC did, how its chosen approach departs from expectations, and what interested stakeholders should watch for next.
Background: DOE’s October 2025 Advance Notice of Proposed Rulemaking
As we discussed here, in a letter dated October 23, 2025, Energy Secretary Chris Wright directed FERC to develop and issue a Final Rule to standardize and accelerate the interconnection process for large loads of 20 MW or more, including facilities co-located with new or existing generation. Secretary Wright provided an Advance Notice of Proposed Rulemaking (ANOPR) outlining fourteen guiding principles for reform, including standardized study processes (with uniform study deposits, readiness requirements, and withdrawal penalties modeled on FERC’s generator interconnection rules in its Order No. 2023), co-location incentives allowing joint load-and-generation interconnection requests, curtailment flexibility for dispatchable loads, full cost responsibility (assigning 100% of network-upgrade costs to the large load), and protection-system requirements.
The ANOPR raised significant questions about FERC’s authority over load interconnections, an area the Commission had historically declined to regulate, and stakeholders widely expected that FERC would ultimately issue a broad, prescriptive Final Rule requiring RTOs/ISOs and other transmission operators to adopt — to the extent that they had not already done so—rules conforming to Secretary Wright’s ANOPR. However, ANOPR also noted that it was “not intended in any way to discourage public utilities from making filings to address these and similar issues under . . . section 205” of the FPA, foreshadowing a continued role for market-specific filings. The ANOPR proceeding elicited over 3,500 pages of comments from across the energy industry that informed FERC’s selection of the path forward.
The Show Cause Orders: Broad Categories of Reforms with Protection for “Existing Deals”
The show cause orders are the long-awaited follow-up to the ANOPR, but the approach FERC chose departs meaningfully from a single, uniform Final Rule. They “preliminarily find that these markets’ existing tariffs appear to be unjust and unreasonable because they do not adequately address the challenges associated with the integration of large and co-located loads onto the transmission system” and that the tariffs “lack provisions” addressing the five principal categories of reforms that FERC identified as necessary to speed large load integration onto the transmission system.[3] Instead of one nationwide rule, however, FERC issued six, region-specific directives under Section 206 of the FPA, which empowers the Commission, on its own motion, to investigate whether an existing rate, term, or condition or service is unjust, unreasonable, or unduly discriminatory or preferential, and to require the relevant public utility to justify it or propose a replacement.
Here, “[t]he six U.S. regional grid operators and their transmission owners must provide justification within 60 days on why their current tariffs remain just and reasonable in the absence of clear and consistent provisions for large load customers — or alternatively . . . propose changes” that make their tariffs just and reasonable in FERC’s view.[4] FERC’s chosen approach reflects the view that region-specific show-cause proceedings will be more efficient in achieving a “resilient, reliable, and forward-thinking grid that empowers communities and safeguards consumers”[5] than a “one-size-fits-all” rule because the RTOs/ISOs have made different levels of progress on large load interconnection issues and operate under different market constructs. FERC also did not pursue the broad jurisdictional assertion contemplated in the ANOPR, instead framing each order around the Commission’s established authority over transmission service, and encouraged the RTOs/ISOs and their transmission owners to submit region-specific proposals under the more flexible FPA Section 205 pathway.
FERC’s orders incorporate these five categories of reforms for grid operators to address:
- Developing efficient transmission service application and study processes, including consideration of alternative transmission technologies.
- Preventing cost shifting, including through financial security and credit requirements, and requiring transparency into transmission costs.
- Accommodating co-location agreements and behind-the-meter generation.
- Providing new transmission services for flexible large loads.
- Developing a process to study generating facilities that serve electrically proximate large loads and co-located loads.[6]
FERC emphasized that the show cause proceedings are prospective and that it “is critical that FERC provide certainty for investors by directing the markets to protect existing deals.”[7] Its actions “are not intended to disrupt existing commercial agreements that large loads and utilities have negotiated or are in the process of negotiating that involve transmission.”[8]
Common Threads and Tailored Directives Due to Regional Differences and Prior Work
Each show cause order institutes a proceeding under FPA Section 206, makes a preliminary finding that the relevant RTO/ISO tariff “appears to be unjust, unreasonable, or unduly discriminatory or preferential,” and gives the RTO/ISO and its transmission owners 60 days to either (1) show cause why the tariff remains just and reasonable without reforms, or (2) explain what tariff changes would remedy the identified concerns if the Commission were to establish a replacement tariff using its Section 206 authority. Each order also directs the grid operator to submit, within 30 days, an informational report on how it intends to ensure adequate generation will be available to serve existing and new large loads; sets a 21-day intervention deadline and a 30-day reply window for interested entities; and establishes a Section 206 refund effective date tied to Federal Register publication. However, the orders “leave room for each RTO and ISO to define large loads and to create operational requirements for those large loads that are particular to their region” and “account for regional differences on topics such as cost transparency, study processes, and network upgrades.”[9]
For four of the grid operators—the New York ISO, ISO New England, the California ISO, and the Midcontinent ISO—the orders share a substantially identical five-part list of directives that parallels the five categories listed above.[10] Those lists direct each RTO/ISO to address:
- the application process, study procedures, and ongoing operational requirements for transmission service taken on behalf of large loads;
- additional transparency into network-upgrade costs, a pro forma cost-recovery agreement, and a mechanism to credit such payments toward transmission owners’ revenue requirements (to mitigate cost-shifting among customers);
- the rates, terms, and conditions of service for co-location arrangements;
- new transmission services reflecting co-located loads, load with behind-the-meter generation, and flexible large loads willing to limit their use of the system; and
- the rates, terms, and conditions for interconnection customers serving electrically proximate or co-located load.
The show cause orders to PJM Interconnection and the Southwest Power Pool are distinct because FERC had already acted on substantial parts of those two regions’ large load interconnection frameworks. PJM’s order has only a four-item directive list and omits the standalone “co-location arrangements” directive that appears in the four “template” orders, and FERC limited the PJM order to large loads that are not co-located with generation. That is because FERC separately addressed co-location in PJM in a prior order and, also on June 18, 2026, issued a further order modifying the discussion in that order, accepting in part and rejecting in part PJM’s compliance filing, directing a further compliance filing, and establishing rates, terms, and conditions for new transmission services in PJM (interim network integration transmission service, plus firm and non-firm contract-demand service).
SPP’s order also has four directives, but the tailoring differs. Unlike for PJM, the SPP show cause order retains directives on co-location. That tailoring reflects SPP’s already-approved High Impact Large Load (HILL) study process, HILL Generation Assessment (HILLGA) process for promptly interconnecting generation that serves a HILL no more than two substations away, and Conditional HILL Service (CHILLS), a new non-firm transmission service available for up to seven years. The SPP order also focuses on provisions requiring the evaluation of alternative transmission technologies, and pro forma provisions in a transmission service agreement memorializing ongoing operational requirements.
Practical Consequences for RTOs/ISOs, Transmission Owners, and Project Developers
For the RTOs/ISOs and their transmission owners, the most immediate consequence is the 60-day compliance clock. Within that window, each grid operator must either mount a substantive defense of its existing tariff against the Commission’s preliminary findings or file tariff revisions addressing the identified gaps. Each grid operator must also deliver the 30-day resource adequacy report. Because FERC invited the RTOs/ISOs and transmission owners to proceed under FPA Section 205, grid operators have an opportunity to shape their own region-specific proposals under that more deferential standard, which offers an alternative to a purely defensive posture under Section 206. The orders also allow requests for full or partial abeyance of some or all aspects of the Section 206 proceedings, within 45 days and for up to 90 days, during which the grid operators and transmission owners could develop Section 205 filings to address some or all of the Commission’s directives. Interested parties may respond to RTO/ISO and transmission owner filings within 30 days.
Transmission owners, including the many investor-owned utilities named in each docket, should evaluate where filing rights lie and coordinate closely with their RTO/ISO, because several directives reach transmission-owner-specific rates and practices. Those directives include cost-recovery agreements and revenue-requirement crediting, among other operational requirements.
For large load customers and the project developers who serve them, the orders are significant but carefully bounded. FERC repeatedly emphasized that the show cause proceedings are prospective and are intended to preserve existing commercial arrangements, and it directed the RTOs/ISOs to propose reasonable implementation periods and effective dates that accommodate deals already negotiated or nearing completion. Customers with executed or near-final interconnection or transmission service agreements should still track the dockets closely because the resulting tariff changes will shape study timelines and cost responsibility while determining the availability of new flexible and co-location transmission services going forward. The changes will also redefine operational obligations such as telemetry and ride-through requirements, as well as curtailment capability. Developers evaluating co-location or behind-the-meter generation strategies should pay particular attention to the regions in which they operate, because the substantive requirements will differ meaningfully between, for example, SPP (with its approved HILL and CHILLS frameworks) and a region that has not made comparable progress on large load interconnection issues.
Financial security and credit obligations enabling large loads to appropriately pay for the expansions needed to serve them have been of significant concern to FERC and industry participants and are also being addressed through the show cause orders. This issue can be complicated jurisdictionally, as a large load retail customer may not be a direct transmission customer of the RTO/ISO under its tariff. It is also complicated on substance, as the costs being incurred to provide service are not necessarily incurred on the same timeline as when transmission service is being provided. Contrast that with generator interconnection, where FERC’s pro forma Large Generator Interconnection Agreement makes it clear that generators can be required to pay up front for the Network Upgrades required to receive interconnection service well before the generator is actually in service. To deal with such issues in some of the show cause orders, FERC preliminarily found tariffs to be unjust and unreasonable because they lack a pro forma cost recovery agreement and that such an agreement should likely be based on the amount of jurisdictional transmission service (in MW) requested to serve the large load. FERC stated that this preliminary finding is not intended to disrupt current commercial arrangements or to prevent RTOs from proposing alternative arrangements that properly allocate costs and avoid existing rate payers bearing related risks.
More broadly, the June 18 orders underscore the trend of escalating federal government scrutiny of large load integration, even as the Commission stepped back from the broad, uniform approach suggested by the ANOPR. The practical takeaway is to engage early and region-by-region, based on business interests and plans. Interested parties should plan to intervene within the 21-day window established in each show cause order—i.e., not wait until after each RTO/ISO initial compliance filing—and participate in the resulting compliance or Section 205 proceedings, all while assessing how their projects fit within each region’s emerging framework. As several commissioners highlighted in separate concurrences, the records built in these six proceedings will drive the next phase of reform.
Finally, FERC is “leaving the Secretary of Energy’s ANOPR docket open for further potential action,” so interested parties should continue to watch that space as well in the event that the regional approach taken in the show cause orders does not achieve what FERC intends and it determines that broader rulemaking action is necessary.
The Foley energy team will continue to track developments in this area and welcomes questions on these issues.
[1] Fact Sheet, FERC Takes Action to Supercharge America’s Grid for Efficiency, Reliability, and a Bold Energy Future, https://www.ferc.gov/news-events/news/fact-sheet-ferc-takes-action-supercharge-americas-grid-efficiency-reliability-and (June 18, 2026) (“Fact Sheet”).
[2] FERC, Staff Presentation: Items E-7 through E-12: RTO/ISO Show Cause Orders, Docket Nos. EL26-67-000, et al., https://www.ferc.gov/news-events/news/presentation-items-e-7-through-e-12-rtoiso-show-cause-orders (June 18, 2026) (“Presentation”).
[3] Id.
[4] Fact Sheet.
[5] FERC, News Release, FERC Launches Aggressive Targeted Action to Speed Large Load Integration, https://www.ferc.gov/news-events/news/ferc-launches-aggressive-targeted-action-speed-large-load-integration (June 18, 2026) ( “News Release”).
[6] See id.
[7] Id.
[8] See https://youtu.be/r7y-iDn-rkU?t=636.
[9] Fact Sheet.
[10] The orders are not identical in every respect: each order includes region-specific background, tariff findings, procedural framing, and filing-rights nuances.
