FERC interconnection standards for large loads

Full Title:
GRID Savings Act of 2026

Summary#

This bill adds a new rule to the Federal Power Act that gives the Federal Energy Regulatory Commission (FERC) clear authority over how very large electricity customers connect to the high‑voltage transmission grid. Its main change is to define “covered large loads” (150 megawatts or more behind a single connection) and require FERC to make binding standards and procedures for their interconnection. The stated policy goal is to set clear rules about studies, cost classification and payment, transparency, and reliability when large industrial or commercial loads join the transmission system.

Key changes:

  • Definition: A “covered large load” is a new or expanded nonresidential load of at least 150 MW behind one interconnection point (including grouped or phased developments).
  • FERC jurisdiction: FERC gets explicit jurisdiction over interconnection of these large loads to interstate transmission lines, and treats the interconnection as part of open access transmission service.
  • Rulemaking deadline: FERC must issue a final rule within one year setting standards, pro forma provisions, and threshold criteria for covered large loads.
  • Cost assignment: Costs for Interconnection Facilities and Direct Assignment Facilities must be 100% assigned to the covered large‑load customer and paid or secured; Network Upgrade costs are allocated to covered large‑load customers and credited against transmission service charges following FERC’s standard procedures.
  • Customer options and protections: Covered large‑load customers may elect to build required facilities, must provide financial security to cover unrecovered costs if they fail to proceed, and receive specified disclosures about costs and alternatives.
  • Voluntary funding option: A covered large‑load customer may voluntarily fund regional or interregional transmission projects in exchange for a FERC‑defined right to transmission service, with limits on how that funding affects selection or cost allocation.
  • ERCOT exclusion: The rules do not apply to transmission wholly inside ERCOT (Texas grid).

What it means for you#

  • Large industrial or commercial customers (new or expanding facilities of ≥150 MW):

    • Must follow FERC’s new interconnection procedures once the rule is issued.
    • Will generally be required to pay 100% of costs for interconnection equipment and directly assigned facilities.
    • May be required to post financial security (for example, a payment guarantee) to protect others if the project is canceled or delayed.
    • Can choose to build their own interconnection or network upgrades (the “option to build”).
    • May be able to voluntarily fund regional transmission projects to gain a defined right to transmission service.

  • Transmission owners and utilities (transmitting utilities):

    • Must follow the FERC rule when a covered large load seeks interconnection.
    • Must classify facilities as Interconnection Facilities, Direct Assignment Facilities, Network Upgrades, or Stand Alone Network Upgrades and disclose costs and allocations.
    • Will need to include the required study processes, timelines, and readiness checks in their tariffs and agreements as adapted by FERC.

  • Other electricity customers and state regulators:

    • State utility commissions will receive disclosure of cost estimates and alternatives for large‑load interconnections.
    • The bill aims to prevent speculative or duplicative interconnection requests from shifting costs onto other customers, but the practical effect depends on how FERC designs the rules.

  • Transmission planners and regional planners:

    • FERC must include pro forma and regionally tailored requirements; planners will need to adapt regional planning and study processes to the new rules.
    • Voluntary funding by large customers for regional projects may be allowed, with defined limits.

  • Texas (ERCOT) entities:

    • The new section does not apply to transmission that occurs entirely within ERCOT.

Expenses#

No publicly available information on a fiscal estimate or cost numbers is provided in the bill text or accompanying material.

Possible cost implications noted in the bill:

  • Covered large‑load customers are required to bear 100% of costs for Interconnection Facilities and Direct Assignment Facilities (direct private cost to those customers).
  • Network Upgrade costs are allocated to covered large‑load customers and credited against transmission service charges consistent with existing FERC methods (affects how costs are recovered but not a dollar figure in the bill).
  • FERC must complete a rulemaking within one year, which may create administrative costs for the agency (not quantified).
  • Transmitting utilities and regional planning bodies may incur compliance and study costs to implement the new standards and disclosures.
  • Covered large‑load customers may face costs to provide financial security, and potential costs if they elect to build facilities themselves.

Proponents' View#

The bill appears intended to address uncertainties and cost shifts when very large electricity loads connect to the transmission grid. Possible arguments in favor include:

  • The bill appears intended to clarify that FERC has authority over very large load interconnections, removing jurisdictional uncertainty.
  • Setting uniform standards and timelines could speed up and standardize the study and interconnection process.
  • Requiring direct assignment of interconnection costs to the large customer could prevent those costs from being borne by other utility customers.
  • Requiring transparency about costs and alternatives could improve planning and decision making for both customers and regulators.
  • Allowing voluntary funding of regional projects may let large customers secure transmission rights and help finance needed grid expansion.

Opponents' View#

The bill’s design raises a number of potential concerns or trade‑offs that are not resolved in the text:

  • One concern is that assigning 100% of interconnection and direct assignment costs to large customers could raise the upfront cost of projects and deter some investments, or push those costs into different parts of a project not covered by the bill.
  • It is not fully clear how the crediting of Network Upgrade costs against transmission service charges will work in practice, and whether this will shift costs in unexpected ways.
  • Requiring financial security to protect other customers could be burdensome for project developers, especially new entrants or those using complex project structures.
  • The one‑year deadline for FERC to issue final rules may be tight for drafting regionally tailored standards and could lead to rushed or incomplete guidance.
  • The definitions and aggregation rules (for example, what counts as a single site, contiguous sites, or affiliated loads) may leave room for dispute and strategic behavior; the bill directs FERC to set criteria but leaves those details to the rulemaking.
  • The voluntary funding option for regional projects may interact with established regional planning and cost‑allocation methods in ways that are unclear and could affect how projects are selected and paid for.