On June 18, 2026, the Federal Energy Regulatory Commission (“FERC”) issued six show cause orders under Section 206 of the Federal Power Act (“FPA”) to each of the country’s regional transmission operators (“RTOs”) and independent system organizations (“ISOs”), along with their transmission owners (collectively, the “Show Cause Orders”). FERC issued the Show Cause Orders as an initial response to the Secretary of Energy’s October 2025 letter directing FERC to initiate an Advance Notice of Proposed Rulemaking (“ANOPR”) presenting potential reforms to ensure the timely and orderly interconnection or large loads to the transmission system. The ANOPR docket, Docket No. RM26-4-000, generated more than 3,500 pages of public comments. The Show Cause Orders also come on the heels of a series of FERC’s actions over the past year designed to address large load growth. These actions include a December 2025 FERC order directing PJM Interconnection, L.L.C. (“PJM”) to adopt clear, transparent tariff rules for large energy users located at or near generation facilities, FERC’s January 2026 approval of Southwest Power Pool, Inc.’s (“SPP”) High Impact Large Load and High Impact Large Load Generation Assessment processes, as well as FERC’s June 2026 approval of SPP’s Conditional High Impact Large Load proposal.
The Show Cause Orders find that FERC has exclusive jurisdiction over the rates, terms and conditions of interstate service to eligible customers on behalf of large loads connecting to the transmission system, and the practices directly affecting the provisions of such interstate transmission of electricity, including the transmission service study process for determining what network upgrades are needed to provide transmission service to eligible customers on behalf of large loads. FERC declined to address its comprehensive jurisdiction over other aspects of the addition of large loads to the transmission system. With regard to state jurisdiction, FERC continued to recognize that the FPA expressly reserves certain authority to states with regard to retail service to large loads and further found that states will continue to regulate: (1) the specific terms of retail sales to large load; (2) which entities may make retail sales within their borders, including which entities are legally permitted to provide electricity to retail large load customers; and (3) any siting decisions and construction associated with the large load project.
The Show Cause Orders find that the RTOs’ and ISOs’ transmission tariffs appear unjust and unreasonable, or unduly discriminatory or preferential for lack of sufficiently clear and consistent provisions to address the challenges posed by the integration of large and co-located loads onto the interstate transmission system. The Show Cause Orders then direct each RTO or ISO to either show cause, within 60 days of the date of the orders, as to why its transmission tariff remains just and reasonable and not unduly discriminatory or preferential without certain provisions addressing certain specific terms regarding the rates, terms, and conditions of service that apply to flexible large loads, co-location arrangement, load with behind the meter generation, and generating facilities with electrically proximate large load or co-located load. Alternatively, the grid operators must explain what changes to their transmission tariffs would remedy FERC’s concerns. The Show Cause Orders further express concern with the grid operators’ need to ensure adequate generation service to serve new large loads and require each RTO and ISO to submit an informational report on resource adequacy to support existing and new large loads within 30 days of the Show Cause Orders. Grid operators and transmission owners are permitted to request to hold all or certain aspects of this proceeding in abeyance for up to 90 days. But such requests to hold proceedings in abeyance must be submitted within 45 days of the issuance of the Show Cause Orders.
A copy of FERC’s Orders, issued in Docket No. EL26-67-000 is available here; Docket No. EL26-68-000 here; Docket No. EL26-69-000 here; Docket No. EL26-70-000 here; Docket No. EL26-71-000 here; and Docket No. EL26-72-000 here.
*Brendan Gaffney is a 2026 summer associate with Troutman Pepper Locke and not admitted to practice law in any jurisdiction.