On June 18, 2026, the Federal Energy Regulatory Commission (FERC) issued tailored show cause orders to each of the six regional grid operators (RTO/ISO) under its jurisdiction—the New York Independent System Operator (NYISO), PJM Interconnection, LLC (PJM); Midcontinent Independent System Operator, Inc. (MISO); Southwest Power Pool, Inc. (SPP); California Independent System Operator Corporation (CAISO); and ISO New England Inc. (ISO-NE). The respective transmission owners in each region were also included in each show cause order (excluding those not subject to FERC’s jurisdiction, such as the Long Island Power Authority and New York Power Authority).
The show cause orders were issued pursuant to FERC’s authority under Section 206 of the Federal Power Act (FPA) to ensure rates remain just and reasonable and in connection with the secretary of energy’s Advance Notice of Proposed Rulemaking (ANOPR), issued in October 2025 to consider taking additional actions to address large loads, such as data centers, that are anticipated to request interconnection in the next few years. Large loads are driving an unprecedented increase in electricity demand across the United States—the ANOPR found that demand growth is now higher than at any point in the past two decades, with development occurring at a pace that calls into question grid reliability. Importantly, FERC signaled that the show cause orders did not purport to intrude on generation siting authority that is reserved for state commissions, like the New York Public Service Commission (NYPSC), and also that the show cause orders were not intended to disrupt existing agreements large load customers have either negotiated or are presently in the process of negotiating for transmission service.
Order EL26-69, addressed to the NYISO, notes that to date, the NYISO has not proposed tariff revisions to address the challenges associated with the integration of new large and co-located loads, despite NYISO’s recognition that such challenges exist and notwithstanding NYISO’s recent stakeholder proceedings relevant to interconnection reforms (culminating in Technical Bulletin No. 266, which is designed to streamline and clarify the load interconnection system impact study process). For example, under the existing Open Access Transmission Tariff (OATT), the large volume of requests may delay an already roughly nine-month timeframe to complete a Load System Impact Study, and resource adequacy, a key issue in light of unprecedented demand growth from large loads, is not formally considered in such load interconnection studies. As a result, FERC made a preliminary finding that the NYISO’s existing OATT is unjust, unreasonable, and unduly discriminatory. Although Order EL26-29 reads that FERC is “encouraged” by the NYISO’s stakeholder efforts, it nonetheless established the proceeding to drive tariff reforms in a sufficiently timely and comprehensive manner to accommodate anticipated large load demand growth.
FERC’s show cause orders first direct each RTO/ISO to submit an information report within 30 days on how each RTO/ISO intends to ensure that adequate generation will be available to serve existing and new large loads. These reports must address any existing proposals through stakeholder processes that are intended to address resource adequacy as well as to outline a schedule to consider said proposals, including milestones such as submittal of proposals to FERC for approval.
Within 60 days, the RTO/ISOs must respond to the show cause orders by either providing justification as to why their current FERC-approved tariffs “remain just and reasonable in the absence of clear and consistent provisions for large load customers” or, in the alternative, propose reforms to establish said provisions. Specifically, FERC identified five categories of reform that should be addressed:
- Developing efficient transmission service application and study processes, including consideration of alternative transmission technologies.
- Preventing cost shifting and requiring transparency into transmission costs.
- Accommodating co-location arrangements and behind the meter generation.
- Providing new transmission services for flexible large loads.
- Developing a process to study generating facilities serving electrically proximate large loads and large co-located loads.
Assuming an RTO/ISO seeks to propose tariff revisions, FERC also signaled an openness to hold the Section 206 proceedings in abeyance for up to 90 days, upon request by either the NYISO or the transmission owners and supported by an explanation and anticipated filing date of such reforms.
Barclay Damon will continue to monitor these proceedings before FERC and any corresponding actions taken by the NYISO or NYPSC.
If you have any questions regarding the content of this alert, please contact Brenda Colella, practice group leader, at bcolella@barclaydamon.com; David Solimeno, associate, at dsolimeno@barclaydamon.com; or another member of the firm’s Regulatory Practice Area.