Since FERC hosted its technical conference in late 2024, many industry stakeholders have submitted their comments addressing how to study and potentially regulate new co-located loads and generation. Several industry stakeholders support studying co-located loads together, arguing this approach could mitigate resource adequacy risks. One official complaint was filed, calling for a review of PJM’s handling of large co-located loads at generating facilities. The complaint and the technical conference comments prompted FERC to open a new docket focused on whether PJM’s tariff should include rules that provide clarity for the connection of large loads while maintaining grid reliability and cost fairness.
FERC’s new proceeding specifically addresses the PJM interconnection process but is likely to influence broader national policy around co-location and large load additions. PJM and its Transmission Owners must respond within 30 days, either justifying the current PJM tariff as “just and reasonable” or, proposing changes to address FERC’s concerns.
At the heart of the issue is cost responsibility. Some large load representatives argue that fully isolated co-located loads, those that do not use the grid for power supply, should not be subject to wholesale service charges or network transmission fees. On the other side, utility representatives and others argue that even these isolated loads serve to benefit from the presence of a grid connections and receive ancillary services such as voltage support and frequency stability, overall reliability and availability and therefore should contribute their fair share toward transmission system costs.
Meanwhile, stakeholders are proposing a range of co-location models for consideration. Some advocate for combining new renewable generation with existing fossil fuel plants to serve local load behind the meter, with surplus energy sold to the grid. Others call for more flexible planning for infrastructure expansion.
The new FERC docket acknowledges jurisdictional complexities related to co-location arrangements. The proceeding involves both federal and state interests, requiring the involvement of FERC, state public utility commissions and other state and local entities. FERC noted that it is a creature of federal statute and has jurisdiction only over those specific matters that Congress has given it the authority to regulate. In its order FERC articulated those matters to define its jurisdiction.
FERC also provided an extensive list of specific briefing questions for respondents to address (See part D of the Order).
Navigating these evolving FERC policies requires proactive planning. TRC’s experts can help assess your large-load interconnection needs, evaluate compliance risks and support strategic planning. TRC clients are advised to review the FERC Order and consider how these changes might impact their operations.
Resources
FERC Order Instituting Consolidated Proceedings
TRC Regulatory Update on Data Center Load Loss Incident
TRC Power System Studies Overview Services
About TRC’s NERC System Studies and NERC Compliance Practice
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This regulatory update is a service to TRC’s utility clients, helping keep you informed of issues that impact your company’s electric reliability risks along with related topics regarding future regulatory developments to help you achieve your company’s business goals.
