FERC Moves Forward Quickly On Generator Co-Location With Large Loads

During last week's 20 February 2025 open meeting, the Federal Energy Regulatory Commission (FERC) initiated a show cause proceeding, directing grid operator PJM Interconnection, L.L.C. (PJM) and PJM's transmission-owning utilities (Transmission Owners) to address the need for tariff changes to govern rates, terms, and service conditions for co-location arrangements.¹ The order is likely to have implications nationwide given the growth of data centers and other large loads seeking dedicated energy sources. Co-location, as defined by the order, is a configuration through which end-use customer load is physically connected to the facilities of an existing or planned generator on the interconnection customer's side of the point of interconnection to the interstate electric grid.² Data centers and other large loads may use co-location arrangements with various configurations, including grid connections, to arrange for energy supplies.