Possible Data Center Rules Evoke Tension Over State Jurisdiction

Energy regulatory and policy attorney Willie Phillips was interviewed by Bloomberg Law about the U.S. Department of Energy's (DOE) letter and proposed rulemaking calling for the Federal Energy Regulatory Commission (FERC) to accelerate the interconnection of large loads. FERC maintains authority over energy transmission and wholesale, or sales of electricity between power suppliers and utilities, in interstate commerce. However, as DOE noted in its letter, the commission historically has not waded into load interconnection, which refers to the process by which project developers connect their facility to the transmission system, also known as the electric grid. Instead, FERC has left this area for states to regulate. DOE's proposal clarifies that the department believes load interconnection falls under FERC jurisdiction and wants the agency to exercise its authority to speed up connecting large loads, in particular data centers. Mr. Phillips, who previously served as the FERC's chair and commissioner, noted any potential proposed rule will face a thorny path to approval and implementation, given concerns already expressed over federal infringement on state decisions.

"FERC has a real challenge when it comes to threading the needle to get this right," he said.

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