By Bridget Bartol, Executive Director, Grid
The Federal Energy Regulatory Commission’s (FERC) June 18, 2026 Section 206 show cause orders may mark a turning point in how large-load customers — particularly data centers and advanced manufacturing facilities — connect to the U.S. electric grid. Rather than issuing a single national rule, FERC directed each of the six Regional Transmission Organizations (RTO) and Independent System Operators (ISO) to demonstrate that its tariffs — the rules, rates, and procedures governing grid connections — remain “just and reasonable” for accommodating large loads or to propose reforms within 60 days.
The orders recognize that existing interconnection and transmission frameworks were not designed for the pace, scale, and concentration of load growth now emerging across the country. At their core, these orders are about one thing: improving speed-to-power without sacrificing reliability or shifting costs to existing customers, a central objective for policymakers on both sides of the aisle. FERC is signaling that interconnection processes must evolve to better reflect modern load growth while maintaining the reliability and affordability of the electric system — and, importantly, giving grid operators the flexibility they need to deliver.
Easing Interconnection Process Bottlenecks
Collectively, the orders signal a shift away from rigid, sequential interconnection processes and toward more flexible and efficient approaches. Key reforms under consideration include:
- Faster and more structured study processes to reduce multi-year delays
- New transmission service options, including interim or non-firm service that could allow some projects to energize sooner
- Dedicated pathways for co-located load and generation arrangements
- Cost recovery agreements designed to ensure large loads bear the costs incurred to serve them
- Greater transparency around upgrade costs and timelines
A common theme across all six proceedings is FERC’s effort to better align interconnection, transmission planning, and resource adequacy considerations. The commission is seeking to move key analyses earlier in the process, reducing the risk of late-stage surprises that can delay projects and increase costs. Throughout, Chairman Swett and fellow commissioners acknowledged the orders reflect a desire to establish greater consistency, transparency, and certainty across the six organized markets while preserving regional flexibility.
FERC’s hearing confirms they view large-load growth as a long-term feature of the planning landscape rather than a temporary trend, mirroring conclusions drawn in the National Electrical Manufacturers Association’s 2026 Grid Reliability Study. In it, NEMA forecasted that data center and industrial facility electricity use will comprise 38% and 17% of net electricity consumption by 2037, respectively. As a result, the market is increasingly rewarding suppliers that can deliver speed, flexibility, and integration. And there are proven technology solutions available today, such as grid-enhancing technologies to help get us there.
The bottom line: interconnection is evolving from a bottleneck into a managed process designed to deliver power faster. FERC is directing regions to mitigate known challenges and require creative thinking to meet the new reality of surging demand. The ideal result is building the system faster than it’s been done in the past.
The June hearing signaled FERC and the regions are aiming to create clearer pathways for bringing new large customers online while maintaining reliability, increasing transparency and protecting customers — all while avoiding sticky jurisdictional challenges and legal durability questions.
Key Takeaways for Electrical Suppliers
For electrical manufacturers operating in the U.S., the implications are near-term and practical. Faster interconnection timelines and phased energization models have the potential to reshape how projects are sited, designed, procured, and built.
Manufacturers are experiencing compressed timelines as hyperscale data center developers and advanced manufacturing projects move at a pace that often exceeds traditional utility infrastructure development cycles.
FERC made it clear that it wants to accelerate interconnection while maintaining reliability and preventing inappropriate cost shifts. If implemented successfully, these reforms could create new opportunities for suppliers that help customers move faster, deploy infrastructure more efficiently, and better manage grid complexity.
What’s ahead for suppliers:
- Greater emphasis on digitalization. Faster studies and more flexible operations will require advanced monitoring, automation, controls, and grid analytics.
- Compressed procurement cycles. As interconnection processes become more streamlined, developers may expect shorter lead times and faster equipment delivery to support growing transmission and substation investments.
- Increased demand for modular solutions. Interim and non-firm service models may favor scalable, rapidly deployable solutions such as skid-mounted substations, mobile transformers, and modular electrical systems.
- Further growth in co-location and distributed infrastructure: Onsite generation, storage, and microgrid configurations will expand with demand for advanced grid technologies.
- Heightened cost discipline. As large-load customers assume greater responsibility for infrastructure costs, developers may increasingly prioritize standardized and cost-effective solutions.
Looking Ahead
FERC’s Section 206 orders do not provide all the answers, but they establish a clear direction of travel. Over the coming months, each RTO and ISO will determine how it intends to respond, and those tariff filings will ultimately shape how quickly large loads can connect and what infrastructure is required to support them.
For U.S. electrical manufacturers, this is both a regulatory development and a powerful market signal. Large-load growth continues to drive a new cycle of grid investment, and these interconnection reforms are intended to help unlock that investment while maintaining reliability and strengthening the overall system.
The companies best positioned to succeed will be those prepared to deliver not simply equipment, but integrated and rapidly deployable energy management and power solutions that support a more dynamic, flexible and affordable electric grid.
Speed-to-power is no longer a policy aspiration. Instead, it is becoming a market expectation.