The Federal Energy Regulatory Commission is the United States' independent agency regulating the interstate transmission of electricity, natural gas, and oil, and overseeing wholesale electricity markets and the regional grid operators (RTOs/ISOs) that run them. FERC has no AI-specific mandate, but its authority over how large new electricity loads connect to the grid and how their costs are allocated has made it a recurring actor in AI data-center policy, where surging data-center demand collides with limited transmission capacity and the question of who pays for grid upgrades.
Authority relevant to AI
FERC's leverage over AI infrastructure runs through three connected functions:
- Interconnection of large loads. Data centers seeking hundreds of megawatts to multiple gigawatts of capacity must connect through grid operators whose interconnection rules and tariffs are subject to FERC oversight. How quickly and on what terms a hyperscale campus can connect is partly a FERC question.
- Wholesale market and capacity-market rules. FERC oversees the capacity auctions run by RTOs such as PJM. PJM's 2025/2026 capacity auction cleared at roughly $269.92/MW-day, about ten times the prior year, a jump widely attributed to AI and data-center load colliding with coal retirements — placing cost-allocation under regulatory scrutiny (Source: ERCOT/PJM auction data; see Data Center Siting / AI Power Politics).
- Co-location and behind-the-meter arrangements. FERC blocked the initial "behind-the-meter" structure of the Talen Energy–Amazon co-location at the Susquehanna nuclear campus in late 2024, requiring it to be restructured — an early signal that direct data-center-to-generator power deals would face regulatory review rather than proceed automatically (see Data Center Siting / AI Power Politics).
Large-power-user market rules (2026)
On June 24, 2026, FERC pressed the regional grid operators to justify or revise their market rules for connecting large power users such as data centers, with the stated aim of preventing the costs of serving that load from being shifted onto other customers (Source: insideaipolicy.com). The action put the cost-allocation question — whether data-center developers or existing ratepayers bear the cost of grid upgrades driven by AI demand — at the center of federal energy regulation, alongside the Department of Energy's parallel projection that data-center electricity demand could exceed 15 percent of US consumption by the end of the decade (Source: insideaipolicy.com).
Relationships
- regulated-by: —
- related: AI Data Centers, Data Center Siting / AI Power Politics, Department of Energy (DOE), AI Power Concentration