Wright Urges FERC to Expedite Large Load Interconnections
Energy Secretary Chris Wright is advocating for the acceleration of large load interconnections in a recent proposal to the Federal Energy Regulatory Commission (FERC). This proposal aims to enhance regulatory frameworks for integrating significant loads, particularly data centers pivotal to artificial intelligence (AI). His call for urgency comes amid a wider initiative to standardize interconnection processes.
Proposal Overview
Wright’s advanced notice of proposed rulemaking, submitted late Thursday, urges FERC to expedite interconnections for large loads that can be curtailed. He also emphasizes the importance of co-located facilities that are both curtailable and dispatchable.
Regulatory Changes Suggested
Historically, FERC has not governed large load interconnections, but Wright argues that these connections fall under the Commission’s jurisdiction according to the Federal Power Act. He believes this change is beneficial for the public.
In a letter accompanying the notice, Wright underscores the need for timely interconnections for large loads served by public utilities. To streamline this process, he proposes 13 guiding principles for FERC’s rulemaking, which include:
- Expediting the study process for flexible loads to 60 days.
- Requiring interconnecting loads to cover the full costs of network upgrades.
- Encouraging simultaneous studies of load and hybrid facilities with generation sources.
- Basing transmission service charges on withdrawal rights.
- Defining “large load” as exceeding 20 megawatts.
Current Landscape of Interconnections
Recent developments show that commercial and industrial loads, particularly data centers, are increasingly connecting to the transmission system. However, rapid growth poses challenges in system planning, resulting in speculative data centers complicating the interconnection queue.
Infrastructure investment for AI is a significant priority for the current administration. For instance, the Stargate initiative, a $100 billion collaboration between OpenAI, Oracle, and SoftBank, aims to establish major data centers to support this growth.
Capacity Constraints and Solutions
While infrastructure expansion is necessary to meet future global load demands, estimates suggest that trillions of dollars will be needed. Nonetheless, there is a strong push towards optimizing the existing grid. A Duke University study revealed that the power system could access over 100 gigawatts of additional capacity if large loads, including data centers, adopt demand flexibility strategies.
Emerging companies, such as Emerald AI and Verrus, are developing flexibility services to enhance grid efficiency. However, these initiatives are still in their infancy. Tyler Norris, the author of the Duke study, advocates for a streamlined service tier for large electricity customers willing to offer flexibility, reinforcing the need for competitive interconnections.
Next Steps and Timeline
FERC is set to address these proposals, aiming for a decision by April 30, 2026. The implementation of Wright’s suggestions could reshape the landscape of large load interconnections, paving the way for a more efficient and sustainable energy grid.
