FERC votes to expedite grid connections for AI data centers
The Federal Energy Regulatory Commission unanimously approved rules to speed up transmission-system connections for large AI data-center users, requiring them to fund any needed grid upgrades.
Washington – The Federal Energy Regulatory Commission (FERC) voted unanimously on Thursday to require that artificial-intelligence (AI) data centers and other large power users be connected to the nation’s transmission system “in a timely and orderly manner.” The commission directed that developers bear the full cost of any grid upgrades needed for their connections.
Commission chair Laura Swett, a Trump-appointed member, said the decision was intended to modernize the electricity market while protecting ratepayers. “I know that Americans across the country are concerned about affordability, and so are we,” Swett said, adding that the commission must ensure “rates are reasonable and that Americans pay their fair share or less.”
The move follows a request from Energy Secretary Chris Wright for the agency to accelerate interconnections to help the United States remain competitive in the rapidly expanding AI sector. Tech firms and data-center developers have welcomed the faster-track process, noting that many projects face years-long delays in securing power.
Under the new order, data-center operators will pay for any transmission upgrades required for their connections, but the rule does not address broader supply constraints that are driving up electricity prices in some regions. In December, FERC previously allowed companies to link data centers directly to power plants to further reduce bottlenecks.
Industry groups, utilities, state regulators and clean-energy advocates have expressed concerns that the policy could limit their ability to manage grid reliability and to enforce renewable-energy requirements. Critics also warn that the rapid expansion of data-center capacity—estimated at over 4,000 facilities with another 3,000 planned—could strain electricity and water resources, especially in states such as Virginia where data centers already account for more than a quarter of demand.
Several major technology companies, including Google, Microsoft, Meta, Oracle, OpenAI and Amazon, have signed a pledge to cover the costs of new power generation and backup systems for their data-center projects, and to prioritize local hiring.
Data from the Electric Power Research Institute indicates that data centers currently consume about 5% of U.S. electricity, a share that could triple by 2035. A recent J.P. Morgan analysis noted that more than 60% of data-center capacity slated for completion by 2027 has not yet begun construction, citing permitting delays and shortages of equipment and skilled labor.
