U.S. Energy Regulator FERC Orders Six Major Grid Operators to "Expedite" AI Data Center Interconnection Applications

U.S. Federal Energy Regulatory Commission (FERC) Orders Grid Operators to Accelerate Connection Applications for Data Centers and Large Power Users. According to the order, the six major grid operators must demonstrate that data centers can connect to the transmission system in a timely and orderly manner, with related costs borne by the data centers themselves. The resolution was passed unanimously by the commissioners. FERC also calls on grid companies to consider "alternative transmission technologies," opening space for innovative grid solutions.
(Background: Raoul Pal: AI is triggering a new business logic, with power and computing bottlenecks sparking a super cycle)
(Additional context: OpenAI catches China disguising ChatGPT as American: influencing AI data center electricity prices, Trump tariffs causing public discontent)

Key Summary

• FERC unanimously approves on Thursday, requiring six major grid operators to speed up connection applications for data centers and large power users
• Data centers must prove they can connect to the transmission system "promptly and in an orderly fashion," and bear the related connection costs themselves
• FERC simultaneously urges grid companies to consider "alternative transmission technologies," potentially including solid-state transformers and superconducting transmission lines

The U.S. Federal Energy Regulatory Commission (FERC) took action Thursday, demanding that grid operators accelerate processing connection (interconnection) applications for data centers and other large power consumers. According to the order, PJM and five other major grid operators must demonstrate that data centers can connect to the transmission system in a "timely and orderly manner," with the costs covered by the data centers. This resolution was passed unanimously by the commissioners.

Behind this is the growing appetite of AI data centers for electricity. The order stems from a request by U.S. Energy Secretary Chris Wray in 2025, aiming to significantly speed up the connection process for large power users. In other words, this time the federal regulators are siding with AI compute power, urging the grid to "make way" for AI.

Paving the Way for Grid Innovation

This order also contains a second layer of meaning. FERC is asking grid operators to consider "alternative transmission technologies." While not explicitly named, this directive may include new technologies such as solid-state transformers and superconducting transmission lines.

For innovative grid tech startups that have long been shut out by traditional grid standards, this is akin to regulators personally opening the door for them. Power is becoming one of the most scarce resources in the AI era—whoever can deliver electricity faster and more orderly to data centers holds a key advantage.

Frequently Asked Questions

Why is FERC demanding faster interconnection for data centers?

Because AI data centers' electricity demand has surged, and traditional interconnection processes are slow. On Thursday, FERC unanimously approved a directive requiring six major grid operators to accelerate processing of large power user connection applications, with costs borne by the data centers. This stems from a 2025 request by Energy Secretary Chris Wray.

What are "alternative transmission technologies"?

They refer to next-generation transmission solutions different from traditional grid equipment. While not explicitly named, this order may include technologies like solid-state transformers and superconducting transmission lines, seen as opening market space for innovative grid startups.