Data Centers Should Pay Their Fair Share

Protect Ratepayers as Data Centers Connect to the Grid

Dear FERC Commissioners: Chair Swett, Commissioner Rosner, Commissioner Chang, Commissioner See, and Commissioner LaCerte, I write in response to your historic June 18 show cause orders addressing the growing challenges that large loads, including hyperscale data centers, pose to the electric grid. My concerns extend beyond reliability and affordability, though both fall squarely within FERC's authority. Communities nationwide are also grappling with the accelerating climate crisis, increased exposure to pollution from fossil fuel generation, growing pressure on limited freshwater resources, and the economic consequences of replacing human jobs with artificial intelligence. The policies now being developed by FERC and regional transmission organizations (RTOs) will either support responsible development or create lasting harm. In your June 18th concurrence, six individual components for RTO filings were included. Many of these were responsive to asks from Sierra Club members like myself. For that, thank you. As you now evaluate my transmission provider's response, I urge you to hold it to the same high standard. I specifically urge you to weigh the following: - Developing efficient transmission application and study processes: Tariff revisions should require RTOs to consistently evaluate advanced transmission technologies (ATTs) as part of transmission planning and when serving new large loads. If ATTs are found to be the most cost-effective option, RTOs should be required to deploy them or risk losing cost recovery. - Preventing cost shifting and requiring transparency into transmission costs: Tariffs should establish clear, transparent methods for identifying, tracking, and assigning transmission costs associated with large loads. States and utilities must also have access to sufficient information to ensure those costs are not shifted onto other ratepayers. - Accommodating cohesive co-location agreements and behind-the-meter generation: Tariff revisions should support co-location and behind-the-meter resources in ways that allow states to achieve clean energy and emissions goals. Interconnection processes should accommodate clean generation and storage technologies alongside large-load development. - Providing new transmission services for flexible large loads: RTOs should develop alternatives to traditional firm transmission service that better reflect the flexibility of many large loads. Innovative transmission service options can reduce unnecessary grid expansion while enabling large loads to provide benefits such as demand response. - Developing a process to study generating facilities that serve electrically proximate large loads and co-located loads: RTOs should adopt consistent methodologies for studying generation that serves nearby or co-located large loads. Greater regional consistency would improve transparency, reduce uncertainty, and better support clean energy development. - Protocols to ensure adequate generation for existing and new large loads: RTOs should use this proceeding to implement durable interconnection reforms rather than relying on temporary fast-track exceptions that undermine Order 2023. Meaningful reforms will help ensure reliable generation while avoiding unnecessary investment in new fossil fuel resources and reducing delays for lower-cost clean energy. The issues raised by large load integration are complex, but the decisions made in this tariff revision will shape the future of my regional electric system for decades. I appreciate your leadership on this issue and urge you to evaluate my grid operator’s proposal with these principles in mind. By protecting ratepayers, supporting clean energy, respecting state policies, and requiring durable planning, FERC can ensure policies that strengthen rather than weaken our nation's electric grid. Sincerely,