The Federal Energy Regulatory Commission (FERC) today issued orders to the six major regional grid operators under its jurisdiction.
FERC has given six regional transmission organizations and independent system operators 60 days to justify their existing rules for connecting data centers, manufacturing facilities and other large energy users to the grid, or file changes to address certain issues cited by the commission.
These organizations are often described as the “air traffic controllers” of the power grid. Although they usually do not own power plants or power lines, they help balance supply and demand, operate wholesale electricity markets, and coordinate grid planning over large areas.
In a press release, FERC said the order is one of the most significant actions taken by the commission to “modernize the nation’s electric markets and advance the economy by accelerating the integration of large energy users onto the grid with additional stringent consumer protection measures.”
Specifically, the Commission set out five categories of possible reforms. These include developing more efficient applications and studying processes for connecting large load projects to the grid, as well as considering “alternative transmission technologies”.
Other areas include preventing costs from being passed on to regular customers by requiring greater transparency around transmission costs, accommodating projects built next to power plants or planning to produce their own power, and providing new transmission services to projects that can shift their demand when the grid is under stress.
“We are setting the stage for a resilient, reliable, and forward-looking grid that empowers communities and protects consumers by changing the way large energy users access the grid,” FERC Chair Laura Sweatt said in the press release. “It is also important that FERC provide certainty for investors by protecting existing deals and guiding markets to unlock opportunities for technological advancement and economic expansion.”
The six grid operators named in the order are PJM Interconnection, Midcontinent Independent System Operator, Southwest Power Pool, California Independent System Operator, ISO New England and New York Independent System Operator.
Additionally, the orders give operators and their transmission owners 30 days to submit reports explaining how they plan to ensure adequate power supply for existing customers and future large energy users.
The order comes as major tech companies are rushing and spending billions on massive new data center projects to train and run advanced AI models. They can demand data center Very of energy.
For example, Kevin O’Leary’s planned data center project in Utah is expected to eventually produce and consume 9 gigawatts of electricity. According to The Salt Lake Tribune, this is almost double the amount of electricity currently consumed in the entire state of Utah.
Nevertheless, community backlash is growing, particularly from local residents concerned about the strain these massive facilities could place on water supplies, the power grid, and their neighborhoods. In some cases, that opposition has already helped defeat proposed data center projects.
A Gallup poll conducted in March found that seven in 10 Americans oppose building a data center for artificial intelligence in their local area, including 48% who are strongly opposed. About 46% said they are very concerned about the environmental impacts of AI data centers.
<a href