Accelerating Energy: Powering Business Through the Energy Transition

Managing the Surge: The Debate over FERC’s Large-Load Interconnections

As data centers continue to put stress on the nation’s electricity grid, federal regulators are moving quickly to stave off overwhelming it. The Federal Energy Regulatory Commission (FERC) is now considering major reforms for large-load interconnections and has launched an advanced notice of proposed rulemaking. Final comments were due on December 5, and final action is expected by April 30, 2026. But conflict is threatening the process, as developers, utilities, state commissions, and other major players remain sharply divided over jurisdiction, cost allocation, reliability, and the pace of interconnection.

What themes are emerging from the comments on FERC’s large-load interconnection rulemaking? How should FERC set guidelines that respect state jurisdiction while still ensuring consistency and transparency? And how is the large-load interconnection landscape likely to evolve in the near term?

In the tenth episode of Accelerating Energy, host and Sidley partner Ken Irvin is joined by Jessica Hogle, head of government relations and regulatory affairs at GridCARE, a startup accelerating speed-to-power for AI data centers by unlocking spare capacity on the existing grid. Together, they dig into the key takeaways from the comment record, the federal-state jurisdictional tensions, the risks of stranded costs, and how affordability and technology trends may inform FERC’s next steps.

Executive Producer: John Metaxas, WallStreetNorth Communications, Inc.

Managing the Surge: The Debate Over FERC’s Large-Load Interconnections 

Ken Irvin and Jessica Hogle 
 January 2025

 Ken Irvin:

As data centers continue to put stress on the nation’s electricity grid, federal regulators are moving quickly to stave off overwhelming it. The Federal Energy Regulatory Commission, FERC, is now considering major reforms for large-load interconnection. The commission launched an advanced notice of proposed rulemaking, with final comments due just this past December 5, but conflict is threatening the process with developers, utilities, state commissions, and a myriad of other major players, all sharply divided over jurisdiction, cost to allocation, reliability, and the pace of interconnection.

 Jessica Hogle:

We have a great challenge before us, right? How are we going to interconnect all of these new large loads, win the AI race for national security and economic prosperity reasons, and maintain a safe, reliable, and affordable grid and service for everyone who uses it?

 Ken Irvin:

That’s Jessical Hogle, Head of Government Relations in the Regulatory Affairs and GridCARE, which builds AI solutions for the electric grid. In this episode, we unpack FERC’s developing regulatory approach to how large energy users connect to the power grid.

We dig into the federal and state jurisdictional tensions, the risk of stranded costs, and how affordability and technology trends should inform FERC’s next steps. From the international law firm Sidley Austin, this is Accelerating Energy. We drill down on critical and late-breaking topics in energy transition and policy and help businesses look over their horizon to what lies ahead. I’m your host, Ken Irvin.

Hello, and welcome to Sidley’s Accelerating Energy podcast, Episode Number 10. We’re on our way. Jessica, great to have you here with us today. Thank you for taking the time, especially during the holiday season, to share your insights on the comments surrounding FERC’s large-load interconnection, rulemaking, and what lies ahead.

 Jessica Hogle:

Thank you. It’s great to be here.

Ken Irvin:

Now, you serve as Head of Government Relations and Regulatory Affairs for GridCARE, a California-based startup that provides customers with a secure platform, capable of identifying and unlocking latent capacity on the grid. You’ve also held several key roles in federal energy regulatory policy, first at Pacific Gas & Electric, and then, later, as Vice President of Federal Affairs at the Tennessee Valley Authority (TVA). That’s quite the envious career path. Before we jump in, could you please share with us a quick snapshot of your background and how you help AI infrastructure developers and utilities unlock the potential of today’s grid?

Jessica Hogle:

Sure thing. Thanks so much for the warm introduction. I think, as you’ve noted, I’ve had two decades of experience in the electricity industry. I love our industry. I think it’s so critically important for economic prosperity, public safety, and livelihood. So, it really is a service industry, and I feel good feeling like I’m serving others, you know, in my day-to-day job. So, that’s a real blessing.

You know, I think we’re in an interesting time in our industry, because we have a great challenge before us, right? How are we going to interconnect all of these new large loads, win the AI race for national security and economic prosperity reasons, and maintain a safe, reliable, and affordable grid and service for everyone who uses it? So, I see really two drivers to the challenge, that’s contributing to the challenge. One is time, and the other is culture. So, as it relates to time, of course...

Ken Irvin:

Just those. Nothing very big. Just time and culture.

Jessica Hogle:

Yeah. You know, as it relates to time, it takes, you know, 18 to 24 months to build a data center, but it takes three years, a decade, we could say, safely, probably, to build new electricity infrastructure, and so, we’ve got a big mismatch there. The other challenge really is cultural. So, these two worlds, right, electricity operators and utilities and data center developers and technology probably could not be more different from each other.

They have different incentive structures. Developers are really looking for speed and clarity, right? So, they’re getting frustrated by the uncertain timelines of how long it’s going to take for them to interconnect. They don’t have a lot of visibility into the process or the queue, and they have a remit, right, to build as fast as they can. Utilities want reliability and certainty, right?

They don't really understand, necessarily, what these developers really need. I remember, at TVA, oftentimes, they would come in asking for a lot more megawatts of a connection than they really needed, and then they would back off. A lot of times, the developers want to be in constrained areas or areas that are already reaching their capacity, and so, we have this kind of fundamental mismatch, and I like to sum it up by saying utilities ask permission, and the data center developers ask for forgiveness.

So, there’s a gap there, but at the same time, we know that headroom exists on the system. So, we’ve seen lots of studies about this. The Duke Nicholas Institute had one by Tyler Norris, suggesting that, really, we're only using the grid to 30 to 40 percent of its capability. There's a lot of redundancies built in, and then there was another study by Stanford, which, I have to say, you know, Stanford being a Stanford-based startup, looking at the Western Electricity Coordinating Council and looking at their transmission system or what capacity they had.

And this study found that, even at the peak, utilities are only using 18 to 52 percent. Most cluster around that 30 percent number. So, if we could get that 30 to 40% of utilization, up by 10 percent, that could unlock 100 gigawatts, right? That's significant, and I know it’s hard to know how much demand is really out there, and we’ll talk about that later. A hundred gigawatts, but if you wanted to trust S&P Global, they’re suggesting that data center power demand will rise to 134 gigawatts in 2030. So, there you go.

So, what GridCARE does to help resolve these challenges and really focus on getting to that 10 percent, right, unlocking the latent capacity, is using a secure platform to understand where headroom exists on the system, and then what areas of curtailment or areas of constraint could occur that requires some mitigation and solution development on the data center side, and really working to kind of marry the data centers with the utilities. Serve as that trusted partner and a mediator in the middle to help address some of those cultural challenges that we talked about earlier.

So, that’s the role GridCARE is looking to play. I think we really see this approach of latent capacity as a bridge, right, between the time needed to build new infrastructure and then bringing those resources on to pay for system upgrades sooner, and we know that better regularization will drive beneficial low growth, will then drive either rate reduction or revenue available for system investments that doesn’t impact rate payers.

Ken Irvin:

The ability to unlock that excess capacity seems, like, critical from where we’re sitting right now. I appreciate that optimizing may not give us everything we need, but it does seem like it could give a big chunk of it, at least. Some people have talked about the grid being like a highway. We see all those metaphors to a highway where off-peak traffic can increase without driving up maintenance costs, making the system more efficient, right? How does that work in practice, though, with data centers? Data centers, who mostly want to be non-flexible load, mostly want to just consume electricity around the clock? Tell us more about how GridCARE’s philosophy approach addresses those concerns.

Jessica Hogle:

So, maybe we’ll start with going to the highway or the interstate assumption. There are definitely periods of time where we want to avoid 95 at all costs, right, but...

Ken Irvin:

We’re a bridge into Washington, D.C., yes.

Jessica Hogle:

That’s right, but that doesn’t mean that that is congested all of the time everywhere at once, right? And so, the grid is the same way, but I think transmission planning, system planning, it’s definitely based on worst-case assumptions. It’s static. It’s sequential. It’s deterministic. So, GridCARE first comes in. We have a platform that is able to leverage AI to identify, geographically, where are those areas where there is headroom on the system.

And then that probabilistic, temporal, 8,760-hour analysis that looks at when could times of constraint occur? How long is it going to last? How frequent is it? And this allows you to really bound the mitigations that would be needed and inform the best solutions for the data centers, and we have a good example of this. So, we partnered with Portland General Electric, and we looked at a very congested area in Hillsborough, Oregon. 

They had hundreds of megawatts in the queue, and the timelines, we’re looking at post-2030 for interconnection and using GridCARE’s platform, we were able to find 400 megawatts of headroom. So, 80 megawatts are going to come online next year, the remainder before 2030. And a good example of a project coming out of here that leverages flexibility is Aligned Data Centers and Calibrant Energy. They have a project that’s going to incorporate a 31-megawatt battery energy storage system. It’ll be operational next year, and that battery... The utility will have access to that battery, and it can function as a grid-responsive asset. It will discharge during areas of peak demand. This will help broader grid reliability and provide that uninterrupted service for aligned customers at no cost to rate payers. 

So, sometimes, when we talk about flexibility, it can be a bad word, and I think it’s nuanced. It’s definitely not unlimited curtailment, as you mentioned, and not all data centers are a monolith. There are different types of data center load, and within that, there’s different options available to them, based on the type of functions that they are performing.

So, I think it’s really a matter of what are those options? What’s the bounded data to inform what is needed? Within the data center, they have their HVAC systems. They have options for temporal load shifting, depending on what kind of data center it is. They have uninterruptible power systems they can leverage, and then, of course, there’s the Bring-Your-Own Generation, BYOG. My college self was embarrassed that I just said BYOG and not BYOB.

Ken Irvin:

I know I’m going to slip up one day and say something else besides Bring-Your-Own Generation.

Jessica Hogle:

That’s right. So, there are different options. There’s a menu of flexibility, and then it’s really just a matter of how do I pick which flexibility is right for me? And I do think that, ultimately, this allows data centers not just the benefit of faster interconnection, because time is money for them, but also, it allows them to be good grid stewards, right? So, battery systems can provide ancillary services for the grid, and so, there really is a great opportunity here. I think that’s what GridCARE is trying to tap into.

Ken Irvin:

Good grid steward as well as, like, additional resources available for grid operation. I think those are very cogent observations. One of the things I’m picking up on in your explanation is the need to study and sort of the regional, local kind of assessment here. I know, in the FERC proceedings, state regulators have raised concerns in their comments about FERC trying to create a national framework for large-load interconnections, but respecting states’ traditional control over distribution planning, retail rates, siting. Give us your perspective of how FERC might set guidance, provide guidelines that respect state jurisdiction, while ensuring the consistency, transparency, taking advantage of that need to look at a regional granular level to really optimize.

Jessica Hogle:

I think there’s plenty of examples of FERC doing this in the past. We saw Order 2222, where FERC set parameters in place to be in response to participate in the market. Similarly with DERs. So, I think that there’s plenty of models that we could look at, that FERC has deployed to reflect modern real-world operations, and figure out a way to integrate that, that still remains flexible and allows the RTOs and ISOs and the states to find the optimal solutions for them.

And I think, on the issue of jurisdiction, we certainly want to avoid this process at FERC to leaving capital on the sidelines or slowing things down, and so, a lot of the comments that you saw noted the risk of that due to the questions around jurisdiction, but overall, there’s another startup in Northern California called Halcyon, and they take all the regulatory filings, and they’re able to condense it, and it’s searchable. So, they did an analysis of the FERC comments, and based on what I’m seeing, it looks like more commenters supported some kind of a FERC framework or minimal standard here to help guide the states, because a lot of states are moving on this.

I can empathize with a developer who has to navigate 50 different processes. So, I think the states have already moved forward. That work should be allowed to continue. It shouldn’t go to waste. I think the first step at the state level was looking at these cost issues, and how do we address the mismatch in timing of the lifespans of these assets and make sure that ratepayers aren’t paying? So, the Smart Electric Power Alliance provided some analysis. There are 65 tariffs pending or in place in 34 states. So, states have moved forward on how do we address the cost issues?

Now I think the next frontier, right, is this notion of flexibility and rewarding good grid stewardship and higher grid utilization, and so, I think there is an opportunity for FERC there. I think they’re going to have to thread the needle on their jurisdictional authority with interstate transmission rates and reliability, and then the state authority over retail and distribution, but again, I think there are good examples of this, that FERC has already provided and done in the past, of cooperative federalism that we can look at and learn from.

And my hope would be that we can see something that’s aligned with the administration’s goal around optimizing the system. I don’t know if you’ve heard the side of the administration before. That’s clearly our lane, and I think there’s a role for FERC here, right, to think about setting some standards in place that can allow that increased grid utilization and reward structure, and also, again, not replace investment in our system, because we know we need to invest in the system.

Ken Irvin:

Definitely building out the resource and adding network, adding capability makes a lot of sense, but one of the things that you were just pointing out resonates with me. Which is, are we using the right models? For a lot of the electric utility, we’re still kind of stuck in an old-style way of thinking. Maybe all of this sudden large load and the forward curve here for demand calls for development of new models, new ways to approach, and you know, I’m sorry everybody on the podcast can’t see, but the Boston Terriers are having their own little battle about federal versus state jurisdiction. It’s hilarious. Too bad we’re not on TikTok, but you know, we need to model things differently. Wouldn’t you agree?

Jessica Hogle:

Totally, right? And I think let’s not forget that it’s not even just these large loads that are trying to interconnect. It’s all the generation that’s trying to interconnect, and then, we also know it’s not just data center developers, but electrification, more domestic manufacturing, right? It’s just, it feels like kind of a never-ending problem, and I love being in an industry where we wring our hands when there’s too much demand for our product. I mean, there’s probably no other industry that is doing that when, you know, they’ve got that much demand.

Ken Irvin:

That is the irony, but electricity supply and demand have to match at every second, at every nanosecond, right, or we have a big problem. Let me follow up here, because we want to be economically efficient in this, right? Like, we don’t want to strand costs. We don’t want to erect barriers to entry. We don’t want to inappropriately let people get a subsidization. All of those, to me, bear on the affordability question, right? So yes, optimize, but how do you make sure it’s economically efficient and we’re not sending the wrong price signals or letting people who have an incumbency advantage get an undue gain?

Jessica Hogle:

So, I think, on the planning front, again, there’s a lot of demand for the product, and there are additional drivers that are kind of compounding this challenge, at least as it relates to data center interconnections, right? One is that in their remit to quickly build these data centers, we saw a lot of duplicative requests, right? So, there’s this concern around phantom load, what’s going to show up or not show up, and all of these requests take time.

So, you know, all the poor folks in Utility Planning Operations that are trying to respond to all these requests that may or may not be real, right? It feels kind of crazy, and then we also know that, within utilities, functions are very siloed. So, the planning function is separate from the operating function. Distribution and transmission may not be together, generation may be in a different group, and so, silos can sometimes prevent real-world operating experience being put to bear within the planning process. So, let’s geek out on this just for a moment, if I may.

Ken Irvin:

Sure. I mean, we’re energy geeks here on the podcast, so go for it.

Jessica Hogle:

So, when we talk about conservative planning practices and reliability standards, the language that is used is N-1 or N-1-1, right? So, your -1 is a contingency. It’s like something happening that you didn’t plan for. It’s not good. So, the planners are planning the system, planning their investments based on this N-1-1, right? So, two things are going to fail, but we’re going to be able to maintain reliability.

But in the operating arena, the folks that are actually operating the system and keeping everything in balance, as we talked about earlier, they’re operating in an N-1 world, because when one thing fails, there are actions that they are going to take, right, to rebalance whatever it is. Like, generation dispatch, they’re going to get the system back into its optimum level, and so, right now, I would say all of these actions that they can take, it’s not, necessarily, being integrated into the planning modeling, right?

The planning modeling is assuming the two things are going to happen, even though, in the real world, most of the time, just one thing is happening. So, not modeling these corrective actions, taking this, like, deterministic versus probabilistic approach, I think this leads to this headroom living on the system, and you know, NERC allows utilities to leverage probabilistic approaches in transmission planning. Utilities already do this.

You know, there was a big drive in the nuclear space to move operating your nuclear fleet from a deterministic to a more probabilistic approach, especially after investments from Fukushima were really driving up costs that may or may not have had as much benefit. So, utilities have this expertise. They are able to do it. If it’s good enough for the nuclear plant, it should be good enough for the transmission system. So, that’s planning.

Ken Irvin:

Seems like a fair point.

Jessica Hogle:

Fair point, and I think, again, you know, we’ve talked about it, but if we can increase utilization of the grid and we can interconnect these large loads faster, who are already going to be subject to these tariffs at the state level, to make sure that they’re paying for their upgrade costs, that they’re paying for the lifetime of their asset there that makes sense for ratepayers. We know that that’s going to drive beneficial load growth and benefits for consumers. I think DOE also had a lot of principles in their guidance to FERC to deal with some of these cost allocation issues or affordability issues that we’ve mentioned.

And then, with the beneficial load growth side, GridCARE recently published a white paper that modeled a mid-sized utility with a million customers, and found that just one gigawatt of new load could result in either a 5 percent reduction for all ratepayers on that system or US$1.3 billion of capital that they could then invest in grid modernization, broader system reliability updates, without needing to raise rates. So, there’s quantifiable benefits, right? That’s what this is about.

Ken Irvin:

Want to learn more about what lies ahead for our energy markets? Sidley’s Energy Summit 2026 will be hosted this coming January 7. The summit brings together investors, sponsors, advisors, and financing parties for a day of forward-looking conversation on the U.S. energy landscape. Our central themes this year include the growing demand on the grid, large-load interconnections, and the need to expand total generation capacity. You’re listening to Sidley Austin’s Accelerating Energy podcast.

We are joined by Jessica Hogel, GridCARE’s Head of Government Relations and Regulatory Affairs, as we discuss stakeholder feedback on FERC’s large-load interconnection rulemaking and how these comments could influence the commission’s final decisions in 2026. Jessica, you talked about the white paper that GridCARE published, and that sounds very interesting. Amazing 5 percent reduction or US$1.3 billion in, basically, net capital. GridCARE also submitted recommendations to FERC. Walk us through those. What are the top-line perspectives of your comments there?

Jessica Hogle:

I think we would love to see a national framework that recognizes rewards, flexibility, and the modern operational characteristics of the system, right, when we were talking about planning earlier. So, as noted, you know, we think that there are models that already exist that FERC can leverage in this process. We talked about demand response being one. Distribute energy resources that are aggregated, being another example, and I think even in the decision that we saw last week in the PJM case, where FERC has now directed...and again, we have a good, hey you, RTO states, you figured this out, but what we’re telling you is...

Ken Irvin:

Yeah, you’re talking about the co-location order that came out Thursday. Yeah.

Jessica Hogle:

Like, you need to have some offerings that recognize we can have non-firm transmission service, right? And so, we feel like that’s great. That is a good model, a good framework to think about real-world operation and like, how, tactically, we can actually implement new loads flexibly, and so, we think that that really is going to be important. We want to reinforce this notion of latent capacity, courage, better grade utilization, but at the same time, recognize that we need to invest in the system.

So, we’re just trying to bring, again, the bridge, those resources to bear so that we can make the system investments that we know we’re going to need to make, and then again, I think it’s important to respect the jurisdictional boundaries, ensure this cooperative federalism approach that sets the minimum standards or the framework in place, but then allows the RTOs and the ISOs partnering with their states to tailor implementation that’s suited for them in their area.

Ken Irvin:

You started off today’s discussion by talking about two things, time and culture, and we’re looking to FERC to process this advanced NOPR by spring of ‘26 and then carry forward, perhaps, with a more specific proposed rulemaking. All of this says to me, the lawyer, that regulatory certainty is kind of difficult. It’s not yet here with us. You know, we’re trying to bridge two industries, culture, the tech sector, the artificial intelligence sector with the utility sector, and we’re trying to do it on a timetable where those two have not been harmonized very well. How do we do that? How do we reconcile that growing gap so that we continue to spur innovation, yet the regulation keeps pace?

Jessica Hogle:

From the FERC standpoint, again, we think setting those minimum standards or really setting the guardrails in place, but having a lot of room in between so that tailoring can occur. I do think that we have to recognize there’s so much that we don’t know and so much that is able to change. We don’t know what the efficiency gains could look like for these data centers. I mean, they’ve already made great strides, right, in their energy and water use. So, I expect that will continue to happen.

We don’t know these new technologies that could develop. They could be real game-changers. So, again, I think having the guardrails in place, but having room to maneuver in between, thinking about things like what is an aspirational goal? What’s a goal that we want to get to? How do we want to track it? But then you figure out how you want to get there, right? So, in my view, let’s have a grid utilization goal. Let’s say we want to get to a 50 percent world, and then again...

Ken Irvin:

Higher utilization because we’re being more efficient, more effective at it.

Jessica Hogle:

Right, and then figure out how you want to get there, right? What makes sense for you and your geography and with your customer base? I think everyone here, including utilities, we should be using AI to solve the problem of AI, right? So, we’re going from this grid that was very centralized, a centralized generation that was then used to provide power through your transmission and distribution networks to end users, to a much more, you know, dare I say democratized system, where people can have an EV that they use time-of-use charging, or they have a Tesla battery pack, or they have a silver panel.

You know, the grid looks very different, and figuring out how all of those pieces could fit together, really running all of the scenarios and the what-ifs, that amount of compute was not possible before. It was prohibitive, and now, because of AI, we can, and so, that’s something that GridCARE is doing with its platform, but AI, it’s going to be such a game-changer for us as humanity. We should figure out a way that we can leverage that to solve the problems that we have today.

Ken Irvin:

You’ve brought us to the end here in a very organized and thoughtful way. To wrap up, I like to ask folks, what do you see coming over the horizon here? What are you expecting to happen as you survey the landscape for large loads, for interconnection, both near term, and as you look out there, at the long term? What are you thinking comes next? What would you like to see happen?

Jessica Hogle:

We have taken a lot of steps to address a cost issue through these different state large-load tariffs. I actually hate using the word affordability, because I think it means different things to different people. It’s quite subjective, but policymakers are grappling with it. They want to make sure that people are able to pay their bills and it’s not taking up this huge chunk of their take-home pay, right? So, it deserves and merits a lot of focus. I think this idea of flexible interconnection, of higher grid utilization is a nice win-win-win solution.

It allows us to win the AI race. It allows us to interconnect loads quickly. It brings the benefit for new revenue for utilities, affordability, for customers and for the data centers, too. Time is money. So, I’m encouraged that this is definitely part of the conversation. It wasn’t before, and even this summer, I wasn’t really hearing about it, and now, it’s, like, all we can talk about, which is great. So, I think that that’s kind of the next frontier of, okay, how do we figure this out? How do we quantify this? How do we have the guarantees in place so everybody can be comfortable with it?

And then, in the long term, the hope is that you have a very dynamic system and you’re able to put all of these different pieces together, and as new technology develops, that everyone who uses the grid is able to contribute and be a good steward of the grid, and that, in turn, then drives cost down for everyone. We talk about energy abundance. What a future, when every user has an opportunity to be a contributor, and you’re driving down costs at the same time. So, to me, that’s a very Pollyannish view of the future.

Ken Irvin:

Maybe optimistic. Don’t be so self-critical. You know, it’s good to have optimism.

Jessica Hogle:

I try to be a positive person, you know?

Ken Irvin:

Yeah. Jessica, thank you. We’re going to wrap up here. We’ve been talking with Jessica Hogle, GridCARE’s Head of Government Relations and Regulatory Affairs, about the wide range of comments filed in FERC’s large-load interconnection proceeding and what the coming year may hold for projects seeking to connect these large loads to the grid. Jessica, it’s been a pleasure speaking with you. We’ve learned a lot.

Jessica Hogle:

Thank you so much for having me.

Ken Irvin:

You’ve been listening to Accelerating Energy. I’m Ken Irvin. Our Executive Producer is John Metaxas. Our managing editor is Karen Tucker, and our Associate Editor is Darren Schabdach. Subscribe on Apple Podcasts or wherever you get your podcasts. Thank you all, and everybody have happy holidays and a happy new year. 

 

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