FERC orders grid operators to fast-track AI data center connections

Under the new directives, six major grid operators must ensure that data centers can connect to the transmission system in an orderly fashion, with developers covering the associated costs. The commission also opened the door for grid tech startups by requiring operators to evaluate alternative transmission technologies, such as solid-state transformers or superconducting lines. Operators have 30 days to report their remaining generating capacity and 60 days to justify or revise their regional electricity rates.

This regulatory push arrives as electricity demand from data centers is projected to triple by 2035, putting immense pressure on providers like PJM. The situation is complicated by a massive backlog in grid connection requests, which currently exceed the capacity of the entire existing power plant fleet. With wholesale electricity rates climbing as much as 267% over the last five years, many tech firms have resorted to expensive behind-the-meter power solutions. Energy Secretary Chris Wright prompted the intervention in October, warning that grid bottlenecks risked stalling U.S. progress in the AI sector. Despite these measures, the energy landscape remains volatile; the current administration recently committed $765 million to cancel offshore wind leases, choosing to pivot funding toward natural gas and geothermal projects instead.