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For years, states have handled who gets to plug into the power grid—and how long that process takes. That system held up fine when energy use was steady. It made sense when electricity demands came from households, offices, and the occasional factory. But that’s no longer the world we live in.
Now, AI data centers are popping up across the U.S., pulling power like steel mills and refineries used to. They run nonstop. They’re massive. And they’re growing faster than most local utilities can manage.
In 2023, data centers accounted for approximately 4.4% of the electricity in the United States. That’s already a big chunk. But by 2028, that could rise to between 6.7% and 12%. Even more astounding — these facilities could account for 60% of new electricity demand over that five-year span. This surge in demand isn’t coming in the distant future, it’s already testing the limits of aging grid infrastructure. It’s the type of pressure that can collapse systems not built for it.
So, the federal government is now taking a more active role in regulating how large energy users are.The Department of Energy (DOE) has issued a formal directive to FERC, the Federal Energy Regulatory Commission, to get involved in deciding how larger facilities connect to the power grid. The goal is getting big power users online quicker while not being mired in red tape, with rules that are easier to understand and more consistent. At least that’s what the goal is.
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According to the proposed changes, FERC would regulate any project that draws more than 20 megawatts — a level that includes most data centers, chip plants and other heavy-duty energy users. Currently, these decisions are mostly made at the state level. However, federal officials say that when the demand is this great, the ripple effect is felt across regions and needs to be addressed on a national level.
Secretary Chris Wright, U.S. Secretary of Energy, didn’t shy away from the implications. FERC has not been regulating load interconnections,” he acknowledged, “but it certainly should be.” These are massive facilities being plugged into a system that spans state lines — which clearly brings them under the Commission’s jurisdiction.
He also tied the move to broader national goals: “This Administration is dedicated to preserving and growing domestic manufacturing, design, and engineering to create well-paying jobs and accelerate American AI innovation.” Both, he emphasized, “demand unparalleled and exceptional amounts of electricity.”
In addition to the transfer of authority, the rule sets up a new procedure designed to reduce lengthy delays in interconnection approvals — a process that currently takes years for many large-scale projects.
Hybrid facilities — projects that both draw power and generate some on-site, like with solar panels, battery storage, or backup gas — would no longer need to file multiple separate applications. Instead, they could submit a single, combined filing. That change saves time, avoids duplicate reviews, and helps move projects forward.
The rule also shifts more of the burden to applying companies. If you want in, you have to pay for the upgrades. You also demonstrate that you’re ready to build, will put down money, and are willing to face penalties if you back out in the middle of the process.
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Why the urgency? Because right now, the system is grinding to a halt. Average waits for interconnection are now more than 3.5 years, with some projects languishing 7 years or longer. That’s longer than it takes to build the data center itself. These delays aren’t simply a nuisance — they’re starting to block development.
To address that, the rule includes a fast-track proposal. If a project can shift when it uses power to off-peak hours, or sign up to reduce load at certain times, it could be approved in as little as 60 days. That’s a big leap forward and a good fit for data centers that can throttle down when needed.
At BigDataWire, we examined this tension in Part 1 of our “Powering Data in the Age of AI” series, where we highlighted that the true bottleneck in AI’s next act is not compute — but power. Now the federal government is staring face to face at that reality.
Not everyone is thrilled. Some utilities support the move. They like the concept of a more straightforward process and less logjam. Others aren’t so sure. They fear it could disrupt current workflows or shut out local planners if the process moves too quickly. State regulators are bound to push back, saying the rule oversteps long-held boundaries and puts regional planning at risk.
Environmental groups also have their concerns. The biggest one? That “AI readiness” could be used to fast-track fossil fuel infrastructure. For them, speed isn’t worth sacrificing sustainability. It’s a fair worry. Yet pressure to act is mounting.
Whether this exact rule is adopted or not, the message is clear: energy policy is moving into the heart of AI infrastructure. Federal agencies are no longer staying on the sidelines. The competition to scale AI is becoming a race for electricity, and as we have already pointed out, whoever controls the energy supply may control the future.
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