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ARTICLE · 29 DECEMBER 2025

FERC Clears The Way For Co-Location

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On December 19, 2025, the Federal Energy Regulatory Commission (FERC or the Commission) issued its much-anticipated order on show cause proceeding concerning the co-location of generation...

United StatesEnergy and Natural Resources
Stephen Hug
Stephen Hug
Emily P. Mallen
Emily P. Mallen
Ben N. Reiter
Ben N. Reiter
Corban Coffman
Corban Coffman
Sharmila P. Das
Sharmila P. Das
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On December 19, 2025, the Federal Energy Regulatory Commission (FERC or the Commission) issued its much-anticipated order on show cause proceeding concerning the co-location of generation and load within the PJM Interconnection, L.L.C. (PJM) market.1 In the order, the Commission finds that PJM's tariff is unjust and unreasonable because it does not provide sufficient clarity on the rates, terms, and conditions of service applicable to generators serving Co-Located Load and does not include transmission services appropriate for customers that are willing and able to limit their use of the transmission system in certain conditions. 

The Commission's order is animated by the perspective that co-location is an important tool to meet the growing demand for energy to power data centers critical to achieving the United States' long-term strategic and economic objectives while minimizing the impact on the grid and consumers. This view is perhaps best summarized in

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