The Federal Energy Regulatory Commission has remained silent on a much-anticipated electricity regulation that would guide the way big tech companies power their data centers, even as FERC officials call the policy effort a top priority.
Last fall, FERC shot down a request from regional grid operator PJM to allow an Amazon data center in Pennsylvania to increase the power load it would take from the nearby Susquehanna nuclear plant. That began an effort to provide clearer federal guidelines for “co-locating” power plants with data centers — the warehouses of computers that Microsoft, Google and Amazon, among others, are building to generate new artificial intelligence models.
FERC ordered PJM in February to propose ways to ensure that co-location doesn’t pose a threat to electric reliability when the mid-Atlantic grid is under stress or add to consumer costs more broadly.
PJM responded in March, laying out eight potential schemes for co-locating data centers and power plants. Mark Christie, the former Republican chair of FERC, promised that FERC would act expeditiously to craft a response to PJM that could be applied to grids across the country. Christie left in August before FERC issued any guidance on co-location. President Donald Trump declined to reappoint him.
The work of developing a policy has been happening behind closed doors at FERC. People who work closely with the commission say the internal disagreement on the approach to any broad rule had halted progress toward the end of Christie’s tenure.
At his first press conference in September, the newly appointed FERC chair, David Rosner, also suggested it’s a priority but offered no timeline. “We are working diligently to adjudicate that record and move something forward,” Rosner said. “I’m really excited about co-location and everything in between and getting the rules of the road in place so that we can unlock all these new technologies, get them on the grid and get data centers built.”
Utilities, power generators, lawmakers and data center developers are all clamoring for FERC guidance as tech companies plan tens of billions of dollars in spending on AI infrastructure, including data centers and electricity contracts.
In general, data center developers are voicing a preference for regulatory certainty as opposed to no rule or guidance.
“Regulatory clarity is required to ensure market participants understand the ‘rules of the road’ and that all customers are protected from undue cost shifts or threats to reliability as the grid grows,” Google told FERC in comments filed last year.
Nationwide, electricity demand is expected to grow 3 percent annually after years of growth below one percent, due in large part to new data center developments.
The problem is particularly acute in PJM Interconnection, the grid serving 67 million people from Chicago to Virginia. PJM is expected to see 30 gigawatts of load growth over the coming four years in large part because of data centers in Virginia and Pennsylvania. That’s the equivalent power demand of over 24 million homes.
Just before leaving office, Christie warned that PJM’s reliability crisis is “here now,” citing results from a recent market auction that struggled to secure future generation capacity for the region.
Christie and Rosner talk about FERC’s role in directing co-location of power and data centers very differently.
At a September Energy Bar Association event, Rosner told the audience he considered his job “to make sure that we can set out clear leadership, clear [and] durable rules that make getting more demand connected to the grid possible,” later adding that “it takes too long to build things in this country.”
“When you’re taking a generator and co-locating with a large load customer like a data center or cluster of data centers, as we said in earlier proceedings, has tremendous implications not only for reliability but for consumer cost,” Christie said at the February meeting.
In a September interview, Christie expanded on his thinking during his tenure as chair.
“My priority was to produce an order that did two things,” Christie said. “It protected other consumers from cost shifting from data center co-location costs, and it protected reliability by making sure that units that were necessary to grid reliability were not taken out of supply without adequate replacement.”
Kent Chandler, former chair of the Kentucky Public Service Commission, said the two were “emphasizing different pieces of the puzzle, but not necessarily in conflict with each other.”
“Christie’s focus has been on what’s at stake — consumer impacts, reliability, and market implications — whereas Rosner’s comments are more about why it’s important to get to an answer and the benefits of having a durable solution,” Chandler said.
What a FERC co-location rule might look like remains anyone’s guess. PJM laid out eight potential configurations in its March response, ranging from treating all co-located load as network load to more experimental pathways such as interruptible service or demand response.
Chandler argued the key is setting broad, durable “rules of the road” rather than prescribing every configuration, striking a balance between protecting consumers from cost-shifts and giving developers the certainty to move forward.
