The directive comes as utilities face mounting pressure to accelerate transmission upgrades and grid interconnections to support the growth of hyperscale data centers amid the expanding power demands of artificial intelligence infrastructure.

At an April 28 media briefing in Washington, D.C., hosted by the National Electrical Manufacturers Association, Don Leavens, the group's senior vice president and chief economist, said it now forecasts U.S. electricity demand growth of more than 55% by 2050, driven heavily by AI computing needs and accelerated industrial activity.

Leavens highlighted that some regions already face grid interconnection timelines stretching five to six years or longer, while hyperscale data centers are often built in roughly 2 to 2.5 years.

"There are two constraints in our economy today," he said at the briefing. "There's a lot of renewables that [are] sitting on the sideline, waiting [to be] connected to the grid. So there's queues for that, but there's also a queue on the demand side."

The rulemaking could influence how utilities study and approve large-load interconnections, allocate transmission upgrade costs and coordinate generation additions needed to support AI-driven electricity growth. It also raises broader questions about federal authority over transmission planning and infrastructure delivery, which have largely been state-run activities.

Fight Over Large-Load Oversight

Historically, FERC has not directly regulated end-use customer interconnections. But the U.S. Dept. of Energy has argued that large-load transmission interconnections should fall under expanded federal oversight as AI-related electricity demand accelerates nationally.

 

   A National Electrical Manufacturers Association analysis projects that regional electricity demand growth will accelerate through 2050, initially driven by data center expansion and later by electric vehicle adoption. Click to enlarge.  

 

   Graphic courtesy of NEMA  

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DOE said the rapid growth of AI-related power demand and large industrial loads made it necessary to standardize interconnection procedures and agreements for such loads, including projects seeking to share interconnection points with generation facilities.

The notice of proposed rulemaking sets out 14 principles to govern how those interconnections would be studied, funded and approved, including standardized study deposits, readiness requirements and withdrawal penalties modeled on existing generator interconnection procedures. 

It also seeks comment on whether interconnection studies for curtailable or flexible large loads could be completed within 60 days, a window that would represent a significant reduction from current timelines in most regional transmission organizations.

Those provisions expose tension between hyperscale developers seeking faster power connections and utilities, manufacturers and regulators concerned about reliability risks, transmission congestion and who ultimately pays for new infrastructure needed to support large-load growth.

At the Energy Bar Association's annual meeting in Washington on April 15, FERC Chair Laura Swett called large-load integration "the most important and pressing problem in contemporary American public policy," according to RTO Insider.

She also signaled an aggressive regulatory posture while emphasizing the need for legally durable orders that can withstand anticipated court challenges.

"I know very well from litigating where the absolute edge of precedent is on many topics in our jurisdiction, and I have an appetite to push right up to that edge, if it may secure effective results," Swett added.

The commission said staff have reviewed more than 3,500 pages of comments and related filings while also evaluating recent actions tied to large-load growth, including co-location rules issued by one large grid operator, PJM Interconnection, and the High Impact Large Load initiative by another regional grid operator, Southwest Power Pool, which was approved earlier this year.

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Contractors Race to Expand Grid Capacity

The North American Electric Reliability Corp. issued its highest-level grid warning in May, citing "significant risks" from large data centers and calling for immediate industry action, as reconductoring and grid-enhancing technologies gained traction as faster alternatives to new transmission construction.

Utilities and developers increasingly are relying on those approaches and behind-the-meter generation to relieve congestion while larger transmission expansion projects move through permitting and construction, Leavens said.

"While we're waiting, the demand peak is going to be over this next five-year period," he said during the briefing, then asked, "So what can we do to meet that demand?"

Leavens said reconductoring projects using advanced transmission cables can often be deployed in roughly 16 to 36 months, significantly faster than the multiyear timelines typically associated with new long-distance transmission construction. Because work proceeds within existing rights-of-way, it avoids much of the siting and permitting burden associated with new-build projects.

The electrical manufacturers group also said grid-enhancing technologies, including advanced monitoring systems, sensors and power-flow controls, could unlock about 200 GW of additional transmission capacity using portions of the existing grid footprint.

Data centers alone will account for 38% of net U.S. electricity consumption through 2037, according to the group's updated study, driven by aggressive hyperscale capital investment and the accelerating energy intensity of AI workloads.

To bridge interconnection delays, Levin said onsite gas generation capacity has increased roughly 1,800% since 2025, while small-scale solar deployment has grown 500% and energy storage installations have risen nearly 70%.

The infrastructure push strain an already tight labor market. NEMA President and CEO Debra Phillips warns that the transformer manufacturing sector alone faces a shortage of roughly 15,000 workers, a supply-chain constraint that threatens to slow the grid buildout even as federal regulators move to accelerate it.

*Correction: In a previous version of this story, NEMA Vice President and Chief Economist Don Leavens last name was misspelled as Levin.