FERC Takes Action on Data Center

On June 18, 2026, the Federal Energy Regulatory Commission issued show cause orders under Section 206 of the Federal Power Act to each six regional grid operators (RTOs/ISOs) under its jurisdiction to make changes to their processes for interconnecting large loads, such as data centers, to the bulk power system. The orders direct each grid operator to revise existing rules to ensure the efficient and reliable integration of large loads, and proposed five categories of further reforms that grid operators should address:

1. Developing efficient transmission service application and study processes, including consideration of alternative transmission technologies
2. Preventing cost shifting and requiring transparency into transmission costs
3. Accommodating co-location arrangements and behind the meter generation
4. Providing new transmission services for flexible large loads
5. Developing a process to study generating facilities serving electrically proximate large loads and large co-located loads

These orders were made in response to the Advance Notice of Proposed Rulemaking proceeding initiated by the U.S. Secretary of Energy in October 2025 which addressed the timely, orderly, reliable, and non-discriminatory interconnection of large electricity loads to the interstate transmission system. Additionally, in March 2026, the White House issued the “Ratepayer Protection Pledge” – signed by seven of the world’s largest tech companies – which stated that such companies would build, bring, or buy their own power for large load facilities. As such, significant attention has now been turned to the potential for co-located, distributed generation to take a center role in data center power generation and expansion. NPGA will continue to examine the implications of these show cause orders as it pertains to co-located, behind the meter power generation and any potential opportunities for the propane industry. For more information, contact NPGA’s Senior Manager of State Government Affairs, Austin Wicker.