The U.S. Federal Energy Regulatory Commission (FERC) has asked major grid operators to expedite the grid connection process for large-scale power-consuming projects such as data centers in an attempt to alleviate the most prominent power access bottleneck in the expansion of AI infrastructure.
Submit a power surplus report within 30 days
The new order requires six major grid operators to demonstrate that data centers can be connected to the transmission system "in a timely and orderly manner." The associated grid connection costs will be borne by the data centers. The decision was unanimously approved by the committee.
As required, each power grid operator must submit a report within 30 days explaining whether there is still available power generation capacity in their respective regions; and within 60 days explain whether the current electricity price needs to be adjusted, or provide an explanation for the existing rate.
The power supply arrangement after the meter is more flexible.
FERC also requires operators to adopt a more flexible approach to data center self-supplied power, or "post-meter power" arrangements. This means that some projects may find it easier to maintain construction progress by using on-campus power generation solutions while awaiting formal grid connection.
The power generation shortage remains unresolved.
However, this measure primarily targets grid connection queues and does not directly address the problem of insufficient power generation capacity in the United States. Currently, not only are data centers queuing for grid connection, but newly built power plants themselves are also facing grid connection delays.
The report noted that by the end of 2023, the scale of power generation projects waiting to be connected to the grid in the United States had exceeded the total installed capacity of existing generator units, indicating that the grid connection queue itself was already severely congested.
Against this backdrop, data center electricity demand is projected to nearly triple by 2035. For the past two decades, many U.S. grid operators have experienced a prolonged period of low demand growth; now, facing the increased load brought by AI, the pressure on scheduling and capacity expansion is significantly rising.
Some technology companies and developers, unable to connect to the grid in a timely manner, have turned to more expensive and complex on-site power supply solutions. Meanwhile, some projects have already been connected, further driving up electricity prices in many areas. Bloomberg data shows that wholesale electricity prices in some parts of the United States have risen by as much as 267% compared to five years ago.
The FERC also requested grid operators to assess "alternative transmission technologies," leaving room for grid technology companies to enter the market. The report mentioned that such technologies might include solid-state transformers or superconducting transmission lines, but the regulator did not name specific examples.
