Top US Energy Regulator Pushes Grids to Overhaul Data Center Power Rules

The top U.S. energy regulator ordered the country’s electric grid operators on Thursday to reconsider rules for connecting very large energy users such as data centers, as demand from server warehouses strains power grids.

Data centers are pushing U.S. electricity use to record highs and requiring more electricity in large swaths of the country than grids can supply, sending regulators scrambling to manage the demand.

The Federal Energy Regulatory Commission draft “show cause” orders direct the six regional grids under its jurisdiction, which excludes Texas, to justify or overhaul their process for powering very large energy users.

FERC’s order follows a directive by U.S. Energy Secretary Chris Wright last year to help expedite the connection of data centers as part of the country’s objective of winning a global race to develop and roll out new AI technologies.

“This is a race against time, and we are going to win,” FERC Chairman Laura Swett said. “This is the biggest priority our country is facing at the moment.”

Grid operators and transmission owners have 60 days to respond to FERC and explain why their current rules are justified or whether they will make changes in five main categories. Those categories include having clear processes for connecting very large energy users, such as data centers, and allocating costs to the large energy customers for the infrastructure needed to serve them.

(Reporting by Laila Kearney in New York; Editing by Mark Porter, Rod Nickel)

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