On January 13, 2026, New York State Governor Kathy Hochul announced the Energize NY Development initiative in her State of the State address, designed to assess and modernize how energy-intensive projects, otherwise known as large loads, connect to the electric grid. On February 12, 2026, the New York State Public Service Commission (PSC) issued an order formally commencing a proceeding to execute the Energize NY Development initiative and evaluate the existing interconnection process for large loads for potential reforms.
In the order, the PSC emphasizes that anticipated load growth in the state has been unprecedented: in 2025, more than 8.3 gigawatts (GW) of new load entered the New York Independent System Operator (NYISO) interconnection queue, and as of February 2026, nearly 12 GW of anticipated load is in the queue for future large-load projects.
The proceeding is being instituted to advance a large-load interconnection framework and will include the review of planning and interconnection processes, cost-allocation mechanisms, and tariff structures relating to the integration of large loads within the state’s transmission and distribution systems. The goal is to “support new demand for electric power and to advance State economic development objectives without adversely impacting other ratepayers or the reliability of the electric system, and to do so in a way that is consistent with the Climate Leadership and Community Protection Act.” While the PSC states it is committed to supporting large-load projects that drive job creation and economic growth while maintaining affordability for ratepayers, it also states it remains committed to ensuring system reliability and the cost-effectiveness of investments in, and operations of, the transmission and distribution system.
The proceeding has six main objectives:
- Modernize the interconnection process for all building loads.
- Improve transparency and predictability related to grid upgrades.
- Ensure that data centers and similar facilities bear the cost they impose on the electric system.
- Provide for the continued reliability of the electric system.
- Develop programs and policies for the interconnection of large loads that consider the objectives of the Climate Leadership and Community Protection Act (CLCPA).
- Explore ways in which new large electric loads could lead to downward pressure on rates for all customers.
As background, the order acknowledges alternative approaches for managing large-load growth being explored in other states, including long-term contractual arrangements, capacity-based charges, and “bring your own generation” models as well as rulemaking that has been proposed by the Federal Energy Regulatory Commission to address the interconnection of large loads.
The PSC will also explore all opportunities that such large loads may represent, such as their potential beneficial reuse of waste heat by serving as a thermal resource to a future thermal-energy network or providing thermal-energy storage. The order directs Department of Public Service (DPS) staff to recognize opportunities within the proceeding that could advance the potential beneficial use of waste heat from these large loads and to ensure coordination with the PSC’s existing proceeding on implementation of the Utility Thermal Energy Network and Jobs Act.
The most immediate next step in the proceeding is for interested stakeholders to provide comments on eight questions included in an appendix to the order by April 13, 2026. Comments in response are due May 13, 2026.
DPS staff will hold at least one technical conference with interested stakeholders before December 31, 2026. DPS staff will also prepare a white paper within one year, or by February 12, 2027, detailing the range of issues associated with large-load interconnection and incorporating the comments received and input provided at the technical conference. The white paper will be subject to notice and comment and will also contain recommendations for the PSC’s consideration.
Barclay Damon will continue to monitor this proceeding.
If you have any questions regarding the content of this alert, please contact Brenda Colella, co-chair of the Regulatory Practice Area, at bcolella@barclaydamon.com; David Solimeno, associate, at dsolimeno@barclaydamon.com; or another member of the Regulatory Practice Area.