By Nick Myers

The U.S. is entering one of the most transformative periods in the history of its electric grid. Demand growth once projected to be flat or modest has surged dramatically due to the rapid expansion of data centers, semiconductor manufacturing, electrified industrial processes and artificial intelligence infrastructure.

States like Arizona, Georgia, Texas and Virginia are experiencing unprecedented requests from large-load customers — sometimes hundreds of megawatts at a time, often with aggressive deadlines and nearly always with major implications for transmission planning, resource adequacy and local reliability.

Recognizing the magnitude of this coming shift, the Department of Energy issued a rare Section 403 directive Oct. 23, requesting that FERC initiate rulemaking procedures and consider an Advance Notice of Proposed Rulemaking (ANOPR) to create a new framework for the interconnection of large loads to the transmission system. The resulting ANOPR, now underway, will shape how quickly, fairly and reliably large loads gain access to the grid for years to come. (See Energy Secretary Asks FERC to Assert Jurisdiction over Large Load Interconnections.)

This development has generated broad national discussion, including among state utility regulators. At the National Association of Regulatory Utility Commissioners’ recent annual meeting, NARUC adopted a resolution emphasizing the need for FERC to respect state jurisdiction and collaborate closely with states as it considers how to regulate large-load interconnections. Far from attempting to block federal action, NARUC instead articulates an important message: States and the federal government must be partners in this process, not competitors. (See Regulators Urge FERC to Honor State Authority over Large Load Interconnections.)

Collaboration, ultimately, must be the animating theme of our national approach. If we treat this as a jurisdictional contest between Washington and the states, we will fail to meet the urgency of the moment. If, instead, we treat this as a shared responsibility — with states leading on retail impacts and FERC serving as a federal backstop where interstate coordination is essential — we can deliver the infrastructure needed to support economic growth, protect reliability and ensure that retail customers are not unfairly burdened by the costs of new large loads.

The Moment Requires Cooperation, not Competition

It is tempting — especially in the traditionally divided landscape of energy regulation — to gravitate toward turf protection. But the challenge before us is too large, too complex and too time-sensitive for regulatory silos. State regulators, utilities, transmission providers, regional planning authorities and FERC must adopt a posture that is less competitive and more cooperative if we want to succeed.

Large-load interconnections today face three fundamental challenges:

1. 1. Timing: Study processes never were designed for single customers requiring 100 to 1,500 MW of new demand in a matter of months.
   2. Cost Allocation: Uncertainty about who pays for transmission upgrades can stall or kill major projects.
   3. Reliability: Sudden new demand can strain generation reserves, transmission capacity and local distribution systems.

States understand these impacts more directly than anyone. They see the near-term pressures on local substations, on summer reliability margins and on the retail rates their constituents ultimately will pay. That is why NARUC’s resolution emphasizes the need to preserve state jurisdiction and ensure retail customers are not left subsidizing massive data center and industrial loads.

At the same time, FERC is the only entity with legal authority to ensure consistent treatment across interstate transmission systems. Large loads have regional impacts. Their interconnection often triggers bulk-system upgrades that span multiple states. Without a federal backstop, transmission planning across state lines becomes slower, riskier and less predictable.

Neither side can succeed alone. For that reason, cooperation — not competition — must be our guiding principle.

FERC as a Backstop Authority, not the Front-line Regulator

The most productive framing is one that treats FERC as a backstop authority — the referee who steps in when interstate coordination or minimum national standards are needed, but who does not displace the states’ essential authority to ensure resource adequacy, reliability and affordability.

Under this model:

• • States retain jurisdiction over retail rates, distribution infrastructure and siting.
  • States lead the conversations around cost shifts, local planning and reliability impacts.
  • Regional transmission operators and utilities handle the technical study processes, applying state-approved resource adequacy and planning assumptions.
  • FERC sets the minimum guardrails for transparency, open access and interconnection timelines on the transmission system.
  • FERC uses its authority only when regional issues cannot be resolved at the state level in a timely manner.

This approach ensures fairness and consistency without undermining state sovereignty. It also provides large-load customers with something they increasingly demand: certainty. Certainty that timelines will not drag on indefinitely. Certainty that rules will not change midprocess. Certainty that their project will not be subject to a patchwork of incompatible interconnection standards across the country.

In other words, FERC should not be the first mover. It should be the backstop — the stabilizing presence that steps in only when needed, and only where states agree that interstate coordination is indispensable.

Why States Must Lead — but not Alone

State regulators are closest to the impacts of large-load interconnection. When a data center proposes a 200-MW facility, it is the state commission that will hear from residents about reliability concerns. It is the state that will be responsible for ensuring adequate generation and reserves. It is the state commission that must determine how costs are recovered — and who bears them.

The NARUC resolution rightly stresses these points. It does not oppose federal involvement; instead, it advocates for a balanced framework in which states maintain authority over matters that directly affect retail customers. The resolution also acknowledges the need for collaboration with FERC and other stakeholders, recognizing that a purely state-led approach cannot solve every regional transmission challenge.

This dual recognition — that states must lead but cannot act alone — is essential. No state wants to see its retail customers subsidizing another state’s economic development. No state wants to compromise its reliability due to regional planning failures. And no state wants to be left without the tools to assess or assign the costs of substantial new load growth.

The Path Forward: A Shared National Strategy

To deliver the infrastructure required for the next generation of American energy and innovation, we will need a coordinated national strategy built around the following principles:

1. 1. Clear, transparent interconnection processes. Large loads must know exactly how long studies will take, what upgrades are needed, and how costs will be allocated.
   2. Strong state-federal coordination. State commissions must be at the table from the beginning—not reacting after federal rules are finalized.
   3. FERC as a backstop — not an adversary. Federal authority should be triggered only when regional solutions are required and state-level mechanisms are insufficient.
   4. Protection for retail customers. States must have a decisive role in evaluating whether new load will shift unfair costs to existing ratepayers.
   5. A commitment to reliability above all else. New development cannot come at the expense of reliability or resource adequacy.

Conclusion: Meeting the Moment Together

Our country is facing an unprecedented wave of demand growth. We can either rise to meet it or fall behind and risk delaying economic development, hindering innovation and compromising the reliability of the electric grid.

Competition between states and FERC is not the answer. Cooperation is.

By embracing a framework in which states lead, FERC can be an essential federal backstop and provide large-load customers with clarity and predictability. This collaborative approach can support the next era of American growth while maintaining affordability and reliability for all consumers.

This moment demands partnership. It demands humility. And above all, it demands a shared commitment to building the grid of the future — not through conflict, but through collaboration.

Nick Myers is vice chair of the Arizona Corporation Commission.