U.S. Pushes Grid Operators to Connect Data Centers Faster

The U.S. Federal Energy Regulatory Commission directed six regional grid operators on 18 June to reform how they connect large electricity users such as data centers, or to justify their existing procedures, in an effort to clear interconnection backlogs and shield consumers from rising costs. The orders require operators to report within 30 days on how they ensure adequate generation for current and projected demand, and within 60 days to explain how they can meet large-load connection requests under current rules or propose changes [1]. FERC suggested tailored reforms including cost-recovery agreements with new large-load customers, aiming to prevent utilities from passing upgrade expenses to residential ratepayers [1]. “It’s essential that policymakers ask, ‘Who pays and who benefits?’ If a network upgrade is built to accommodate a data center, the consumer should know how much that’s going to cost,” said Costa Samaras, an engineering and energy policy researcher at Carnegie Mellon University [1]. The commission also endorsed technologies that make better use of existing grid capacity, such as tools that optimize power routing on transmission lines and power-flexible data centers that can shift compute workloads to locations with available electricity [1]. Samaras noted that encouraging such flexible users to participate in the grid is preferable to having them install independent generation and treat the grid only as emergency backup [1]. Global data center electricity consumption reached an estimated 415 terawatt hours in 2024, roughly 1.5 percent of worldwide demand, and the International Energy Agency projects that figure could double by 2030 [2]. Hyperscale and colocation facilities now account for about 74 percent of U.S. server energy use, a share that has grown markedly over the past decade as workloads migrated away from on-premises infrastructure [2]. The rapid expansion has already triggered local opposition in parts of Europe, the U.S., and South America, where residents bear environmental and social costs while benefits flow to distant actors; billions of dollars in U.S. projects were halted or delayed between May 2024 and June 2025 [2]. FERC’s directives also address speculative interconnection requests, which can overburden grid planners. The commission proposed that operators provide planning information in phases as developers demonstrate greater financial commitment—what Samaras described as waiting “until there’s more steel in the ground” [1]. Another measure would allow a single impact study when a power plant and a similarly sized large load apply for access near each other, rather than conducting sequential studies [1]. Ari Peskoe, an electricity policy researcher at Harvard Law School, cautioned that the transparency requirements may weaken in practice. “I think when it’s implemented it will be less transparent than FERC would like,” he said [1]. The Edison Electric Institute, which represents investor-owned utilities and has historically lobbied against climate regulations, told Politico the commission was advancing shared goals [1][8]. Nvidia called the orders “a pro-growth, pro-affordability and pro-reliability policy” [1]. If FERC finds any operator’s response inadequate, it could launch a formal rule-making process that typically takes two to five years and invites more public comment and potential legal challenges [1]. Samaras added that while data centers dominate current debate, the same policies could ease grid integration for future electrification loads, including industrial users, residential heat pumps, and electric vehicles [1].