Category: Federal Energy Regulatory Commission

FERC Issues Order Clarifying Data Center and Large Load Interconnection Procedures in PJM

Mark R. Haskell, Brett A. Snyder, Lamiya N. Rahman, and Emily S. Childress ●

The Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued an order on December 18, 2025, creating a framework for how large co-located loads, such as data centers, can connect to the grid in a timely, efficient, and fair manner.[1] In February 2025, the Commission initiated Docket No. EL25-49-000, a show cause proceeding under section 206 of the Federal Power Act (“FPA”), directing PJM Interconnection, L.L.C. (“PJM”) and PJM transmission owners to show cause as to why PJM’s governing documents addressing service arrangements between and among generators and co-located load remain just and reasonable and not unduly discriminatory or preferential.

The Commission’s Order—finding that PJM’s current tariff is unjust and unreasonable—directs PJM to implement revisions to clarify what steps entities must take to effectuate co-located load arrangements, to establish three new transmission services, and to create new behind-the-meter generation rules. The Order also seeks additional briefing on the appropriate rates, terms, and conditions of the new transmission service offerings. 

First, several key terms are important to understand in the context of the Commission’s Order. The Order defines “Co-Located Load” to mean a “configuration that refers to end-use customer load that is physically connected to the facilities of an existing or planned Customer Facility on the Interconnection Customer’s side of the Point of Interconnection to the PJM Transmission System.”[2] A “Co-Location Arrangement” refers to both the Co-Located Load and the associated generator. Other capitalized terms used throughout the Order are defined in PJM’s tariff.[3]

FERC v. States: Who Has Jurisdiction? 

Regulating large loads, such as data centers, requires involvement from local, state, and federal entities. FERC’s jurisdiction is limited; it can only regulate matters that Congress authorizes. Under the FPA, states have authority over any matters not expressly conveyed to the Commission.[4] The Order addresses the jurisdictional divide in the specific context of Co-Located Load, noting that FERC has authority to oversee the terms and conditions of generator interconnection to any Commission-jurisdictional distribution facility or transmission facility, and to ensure that rates for transmission service in interstate commerce are just and reasonable.[5] Concurrently, states retain exclusive jurisdiction over the specific terms of retail sales, generator siting, the generation mix, and transmission in intrastate commerce.[6]

Why PJM’s Tariff Is Not Just and Reasonable

The Commission ultimately found that PJM’s current tariff is not just and reasonable, and the Order focused on three key reasons for this: (1) a lack of consistency and clarity regarding serving Co-Located Load, (2) failure to properly allocate costs to the entities that cause the costs to be incurred and reap the resulting benefits, and (3) outdated behind-the-meter generation (“BTMG”) rules that do not account for large loads on the scale of data centers. 

To read the full client alert, please visit our website. 

[1] PJM Interconnection, L.L.C., 193 FERC ¶ 61,217 (2025) [hereinafter PJM Order].

[2] Id. at P 1 n.3. The Commission directed PJM to incorporate this definition into its tariff. Id. at P 164. 

[3] See PJM Governing Documents, Open Access Transmission Tariff, available at agreements.pjm.com/oatt/3898.

[4] Nat’l Ass’n of Regul. Util. Comm’rs v. FERC, 964 F.3d 1177, 1187 (D.C. Cir. 2020) (citing N. Nat. Gas Co. v. State Corp. Comm’n of the State of Kan., 372 U.S. 84, 91-93 (1963)).

[5] PJM Order at PP 171-174.

[6] Id. at PP 167-170.

FERC Affirms Texas LNG Export Project on Remand and Rejects Attempts to Enlarge Diminished Scope of Environmental Review

Mark R. Haskell, Brett A. Snyder, and Camila Thorpe ●

The Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued an Order[1] addressing the United States Court of Appeals for the District of Columbia Circuit’s (“D.C. Circuit”) second remand concerning Texas LNG Brownsville LLC’s (“Texas LNG”) proposed liquefied natural gas (“LNG”) terminal project (“Texas LNG Project”) on August 21, 2025. The Commission’s Order affirms its prior determination that the Texas LNG Project is not inconsistent with the public interest and grants Texas LNG a five-year extension of time, to November 22, 2029, to construct and make available for service the Texas LNG Project.

BACKGROUND

Proceedings Before FERC

The Texas LNG Project, authorized by the Commission on November 22, 2019, under section 3 of the Natural Gas Act (“NGA”), involves the construction and operation of an LNG export terminal, with a capacity of approximately four million metric tonnes per annum (“MTPA”). The Commission determined, based on the findings presented in the final Environmental Impact Statement (“EIS”), that construction and operation of the project, as described in the final EIS, would be an environmentally acceptable action.[2]

To read the full client alert, please visit our website. 

[1]Texas LNG Brownsville LLC, 192 FERC ¶ 61,170 (2025).

[2] Authorization Order, 169 FERC ¶ 61,130 at P 86.

Supreme Court Scales Back the NEPA Roadblock to Infrastructure Projects

Margaret Anne Hill and Stephen C. Zumbrun ●

Overview

On May 29, 2025, the U.S. Supreme Court issued a significant decision clarifying the scope of environmental review required under the National Environmental Policy Act (“NEPA”) for major infrastructure projects. The Court recognized and reined in what infrastructure practitioners have long understood: NEPA strayed far beyond its “procedural” and “informational” roots to become an obstruction to infrastructure projects across the country.

As brief background, a project developer filed an application with the Surface Transportation Board (“STB”) for a proposed 88-mile railroad line in Utah. The STB, pursuant to its NEPA requirements, issued a 3,600-page environmental impact statement (“EIS”) analyzing the environmental effects of the project and ultimately approved the railroad line. Groups challenged the STB’s approval, and the D.C. Circuit vacated the STB’s decision, ordering the STB to analyze the potential “upstream” impacts of the proposed railroad, which included possible increased oil and gas drilling activities in Utah, and potential “downstream” impacts of the railroad, such as increased oil refining in Texas.

The Supreme Court reversed the D.C. Circuit Court’s prior decision, finding that the D.C. Circuit: (1) did not afford substantial deference to the STB required in NEPA cases, and (2) incorrectly ordered the STB to review the environmental effects of projects separate in time and place from the actual 88-mile railroad under consideration.

Continue reading “Supreme Court Scales Back the NEPA Roadblock to Infrastructure Projects”

Unleashing American Energy: Trump Administration’s Latest Executive Orders

Margaret Anne Hill, Frank L. Tamulonis III, Melissa A. Scacchitti, and Stephen C. Zumbrun ●

New Executive Orders and Proclamation

On April 8, 2025, President Donald J. Trump issued three significant executive orders (“EOs”) and a fourth proclamation consistent with his pledge to “Unleash American Energy.” These Presidential actions, titled (1) Strengthening the Reliability and Security of the U.S. Electric Grid, (2) Protecting American Energy from State Overreach, (3) Reinvigorating America’s Beautiful Clean Coal Industry, and (4) Regulatory Relief for Certain Stationary Sources to Promote American Energy, seek to promote domestic oil, gas, and coal energy production. Each of these actions is discussed below.

Strengthening the Reliability and Security of the U.S. Electric Grid, EO 14262

This EO directs the Secretary of Energy to streamline emergency processes and to develop a uniform methodology for analyzing reserve margins across all regions of the bulk power system. The stated needs for the EO include aging infrastructure, increased need for electricity, and demand for energy use by datacenters.

Continue reading “Unleashing American Energy: Trump Administration’s Latest Executive Orders”

LNG by Rail: The D.C. Circuit Vacates a DOT Rulemaking and Outlines a Path for Challenges Yet to Come

Mark R. Haskell ●

In Sierra Club v. United States Dep’t of Transportation[1],a panel of the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated and remanded a final rule[2] issued by the Department of Transportation (“DOT”) permitting the transportation of liquefied natural gas (“LNG”) in approved rail cars. The final rule was subsequently stayed and never took effect.

DOT Rulemaking & the Sierra Club Decision

The rulemaking proceeding began with an executive order published on April 10, 2019. Then President Trump directed the Secretary of Transportation to propose a rule to permit LNG to be transported in approved rail cars within 100 days from the date of the executive order and to finalize the rule within thirteen months.[3]  DOT subsequently issued a proposed rule that would permit the transportation of LNG by rail in DOT-113 rail cars. The proposed rule proposed no limit on the number of cars to be used to transport LNG on a single train and imposed no mandatory speed limit. The proposed rule also included a preliminary environmental assessment finding that the proposed rule would have no significant environmental impact.[4]   

The proposed rule was challenged by environmental organizations, states, and the National Transportation Safety Board, all citing potentially grave risks related to potential explosions or fires related to transportation of LNG by rail and separately arguing that the proposed rule failed to mitigate those risks.[5] 

Continue reading “LNG by Rail: The D.C. Circuit Vacates a DOT Rulemaking and Outlines a Path for Challenges Yet to Come”

In Order No. 2023, FERC Takes Step in Reforming Transmission Grid Policies by Enacting Generator Interconnection Reforms

Mark R. Haskell, Brett A. Snyder, Lamiya N. Rahman, and Jane Thomas

On July 28, 2023, the Federal Energy Regulatory Commission (“FERC”) unanimously approved Order No. 2023, a Final Rule designed to streamline the process by which generation resources can connect to the interstate transmission grid.

At a high level, the Final Rule substantially revises the current pro forma large generator interconnection procedures (“LGIP”) and agreement (“LGIA”) with the following updates: 

      • Replacing the current first-come, first-served process with a first-ready, first-served interconnection cluster study process.
      • Increasing the speed of interconnection queue processing by, among other things, imposing strict study deadlines and penalties on transmission providers.
      • Incorporating technological advancements into the interconnection process.

Order No. 2023 also makes changes to the small generator interconnection procedures (“SGIP”) and agreement (“SGIA”).

To read the full client alert, please visit our website. 

Accounting for Change: FERC Proposes Accounting and Financial Reporting Reforms to Address Renewable Energy Assets

Mark R. Haskell, Brett A. Snyder, and Lamiya N. Rahman


The Federal Energy Regulatory Commission (“FERC” or “Commission”) recently issued a Notice of Proposed Rulemaking (“NOPR”) to address industry concerns that FERC’s current Uniform System of Accounts (“USofA”) does not adequately account for renewable energy assets. The NOPR, which was released during the last Commission open meeting, proposes the following four categories of amendments to the USofA, as well as conforming revisions to FERC’s accounting reports:

      • Creating new production accounts specifically dedicated for wind, solar, and other non-hydro renewable assets;
      • Creating a single dedicated functional class for energy storage accounts;
      • Specifying the accounting treatment of renewable energy credits (“RECs”) and similar instruments by codifying prior Commission guidance; and
      • Adding new dedicated accounts for hardware, software, and communication equipment within existing functions in the USofA.

Additionally, the NOPR requests feedback on whether the FERC Chief Accountant should issue accounting guidance related to hydrogen.

To read the full client alert, please visit our website. 

FERC Proposes Expansion of Duty of Candor Obligations

Mark R. Haskell and Charles J. Dickenson *

On July 28, 2022, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued a Notice of Proposed Rulemaking (the “Notice”) in Docket No. RM22-20-000 to expand the scope of the duty of candor to all entities making communications on matters subject to the jurisdiction of the Commission.

Through the Notice, the Commission explains that it intends to fill in a “patchwork” of existing rules and regulations concerning a regulated entity’s obligation to provide accurate and truthful information to the Commission. For example, the Commission’s current rules require that a variety of submissions to FERC, such as periodic or annual reports, written statements in investigations, filings, and testimony and evidence, be submitted under oath. Similarly, Commission precedent imposes a requirement on pipeline applicants seeking certificates of public convenience and necessity under Section 7 of the Natural Gas Act (“NGA”) to disclose “fully and forthrightly . . . all information relevant to the application.” In addition, in any filing with the Commission, the signature required for each filing constitutes a certification that “[t]he contents are true as stated, to the best knowledge and belief of the signer.”

To read the full client alert, please visit our website. 

* The views expressed in this publication are those of the authors only and do not necessarily reflect the views of the law firm of Blank Rome LLP or any entity represented by the firm.

D.C. Circuit Upholds Cutting of Transmission Incentives by FERC

George D. Billinson

On February 19, 2021, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) upheld a decision by the Federal Energy Regulatory Commission (“FERC” or the “Commission”) cutting transmission incentives previously granted to three electric transmission companies.

The Energy Policy Act of 2005[1] amended the Federal Power Act to require FERC to promulgate a rule creating incentive-based rate treatment for electric transmission.[2] The rule was intended to “promote reliable and economically efficient transmission and generation of electricity by promoting capital investment in the enlargement, improvement, maintenance, and operation of all [transmission] facilities, . . . provide a return on equity that attracts new investment in transmission facilities, . . . [and] encourage deployment of transmission technologies and other measures to increase the capacity and efficiency of existing transmission facilities and improve the operation of the facilities . . . .”[3] FERC promulgated such a rule, which is codified in the Commission’s regulations.[4] One incentive available to a stand-alone transmission company (a “Transco”)[5] is “[a] return on equity [“ROE”] that both encourages Transco formation and is sufficient to attract investment.”[6]

Because FERC has traditionally viewed independence as a hallmark of a Transco, it considers the ownership and business structure of the Transco to ensure that the Transco operates independently of other market participants when deciding whether to grant such incentives. FERC has declined to establish a particular methodology for reflecting the degree of a Transco’s independence or specific incentive levels.[7] However, the Commission has made clear that it “will consider the level of independence of a Transco as part of our analysis when we determine the proper ROE for the Transco, and evaluate the specific attributes of a particular proposal, including the level of independence, to determine appropriate incentives.”[8] Continue reading “D.C. Circuit Upholds Cutting of Transmission Incentives by FERC”

December 1, 2020: Live CLE Webinar “The Energy Industry after the Election: What to Expect in 2021 and Beyond”

The energy industry has been at the forefront of the 2020 election, and energy development is an issue that polarizes Americans and our businesses and political leaders in choosing the path for the future. Energy developments are inextricably linked to our economy and national security, and the decisions and policies that will be implemented over the next four years are critical to the nation and our participation and role in world affairs. 

Please join us for the webinar, The Energy Industry after the Election: What to Expect in 2021 and Beyond, on Tuesday, December 1, 2020, from 12:00 p.m. to 1:30 p.m. EST, where thought leaders from Blank Rome LLP and Blank Rome Government Relations LLC will provide their perspectives and insights on the following post-election topics:

  • The energy agenda of 117th Congress
    • Tax incentives
    • Hydraulic fracturing
    • Renewables
    • Climate change
  • The energy priorities of the next presidential administration
    • Energy policy
    • Regulatory developments impacting energy development and growth
    • Impacts of climate litigation and the ESG movement
  • Transactions and energy development: Impact of the election on the markets
Continue reading “December 1, 2020: Live CLE Webinar “The Energy Industry after the Election: What to Expect in 2021 and Beyond””