The Federal Energy Regulatory Commission on Dec. 18 directed the PJM Interconnection to establish transparent rules to facilitate service of AI-driven data centers and other large loads co-located with generating facilities.
In the order, the Commission finds PJM’s tariff unjust and unreasonable due to a lack of clarity and consistency in the rates, terms, and conditions that apply to interconnection customers serving co-located load and eligible customers taking transmission service on behalf of co-located loads.
PJM’s tariff is unreasonable because it does not account for transmission services where eligible customers can manage energy withdrawals for co-located load, FERC said. FERC directs PJM to revise its tariff to require its eligible (transmission) customers serving co-located load to choose from several transmission service options.
FERC also directed PJM to report, by January 19, 2026, on the status of its proposals to speed up the addition of generating capacity, including:
1. Expedited interconnection process for shovel-ready projects,
2. Changes to PJM’s reliability backstop mechanism for resource shortfalls, and
3. Enhanced load forecasting and demand flexibility measures to identify new capacity needed for system reliability.
The Commission’s action stems from its February 2025 show cause order raising concerns that PJM’s tariff lacks clarity on rates, terms, and conditions for co-location arrangements.
The Commission ordered PJM to justify its current tariff or propose changes to resolve these concerns.
FERC’s Dec. 18 order addresses PJM’s response.
