Instead, the commission is tackling the problem of surging energy demand from data centers on a regional basis, saying existing rules appear “unjust and unreasonable” and fail to adequately address how to integrate large loads onto the national transmission system.

In what is called a show-cause order, FERC ordered each RTO and ISO to assess its existing rules and either provide evidence as to why they do work or propose alternative solutions, placing the onus on the grid operators and state regulators to accelerate data center deployment while protecting consumers from footing the bill.

The decision comes as the Trump administration has called for the accelerated deployment of facilities such as data centers to facilitate the growth of artificial intelligence technologies. Winning the race for AI over foreign adversaries such as China has become a top goal of Trump’s second presidency. 

While the administration has repeatedly pointed to the national security benefits associated with building out AI, the rapid construction of data centers is becoming a political problem for Republicans ahead of the midterm elections, as voters have begun to blame these facilities for surging electricity bills. 

In October, the Energy Department directed FERC to initiate a rulemaking process for accelerating the connection of large loads to the grid, suggesting the commission assert jurisdiction over terms, rates, or conditions for how facilities such as data centers can connect to the network. 

While Thursday’s orders do not go as far as suggested in that they do not involve sweeping rules, the commission said the decision does not preclude future rulemaking. 

Energy Secretary Chris Wright praised the orders later on Thursday, saying the decision will deliver “the speed-to-power that is critical to supporting American innovation and national security” while also protecting consumers. 

“Thanks to President Trump, America is entering a period of unprecedented electricity demand driven by manufacturing, innovation, and economic growth. Meeting that demand requires building more energy infrastructure and bringing new power online faster,” Wright said in a press statement. “This Administration is working to remove barriers, accelerate development, and ensure America has the affordable, reliable, and secure energy needed to power a new era of prosperity while delivering on President Trump’s Ratepayer Protection Pledge.”

The Trump administration has already attempted to force data center developers, such as Microsoft, Amazon, and Meta, to provide their own power for their electricity-hungry facilities to prevent costs from trickling down to consumers. 

Most notably, several Big Tech firms signed a “ratepayer protection pledge” in March, vowing to bring their own energy and pay for grid infrastructure upgrades needed for their operations. 

Some industry experts aren’t convinced this will protect homeowners from increased bills, as the pledge is voluntary. 

Federal regulators, though, are hopeful that the reforms resulting from Thursday’s orders will give the commission the information it needs to enforce those commitments. 

Under the orders, the six RTOs and ISOs have 60 days to justify to FERC that their rules remain just and reasonable without adding specific provisions focused on integrating large loads, such as data centers. 

They have also been ordered to file informational reports within 30 days to ensure adequate generation is available to existing and new large loads in the regions. 

If any of the grid operators wish to seek an abeyance to the order, they have 45 days to make that request.

The orders have been sent to PJM Interconnection, the Midcontinent Independent System Operator, California Independent System Operator, Southwest Power Pool, New York ISO, and ISO New England. 

FERC has never asserted jurisdiction over retail load interconnections before, as the issue has historically been regulated by states. 

Industry groups, such as the National Association of Regulatory Utility Commissioners, previously cautioned FERC against regulating data centers, saying it would interfere with states’ ability to set retail rates. 

Even former FERC Chairman Mark Christie, who was replaced as chair last summer, has advised against using federal jurisdiction for interconnecting data centers. Christie has said the move could raise retail consumer costs and overall reliability. 

FERC Chairwoman Laura Swett acknowledged the jurisdiction concerns during Thursday’s open meeting, saying the RTO and ISO orders were specifically designed to ensure that the commission did not overstep. 

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“The rates for interstate transmission service, and the processes for interconnecting new generation generators to the transmission system have always been squarely within FERC’s jurisdiction,” Swett said. 

“Nothing in today’s orders intrudes either on the authority of states to select sites and permit generating resources or on the authority of state [public utility commissioners] to set the rates, terms, and conditions of retail sales of electricity,” she added.