In our first Carolinas Grid Engine article, we examined the energy regulatory considerations associated with grid modernization. This installment explores a different question: whether FERC’s latest directive could lead to certain large computational loads, including data centers, becoming directly subject to NERC reliability regulation.

The Federal Energy Regulatory Commission (FERC) recently directed the North American Electric Reliability Corporation (NERC) to develop reliability standards addressing certain large "computational loads," including data centers and other electricity-intensive computing facilities. The Order may represent FERC's first effort to evaluate whether a category of electricity consumers directly interconnected to the Bulk-Power System should be registered as NERC entities and become directly subject to mandatory reliability obligations.[1]

This proceeding comes as data-center investment, advanced computing infrastructure, advanced manufacturing growth, and associated electricity demand accelerate across the Southeast. Those same trends are central to the work of the Carolinas Grid Engine (CGE), a National Science Foundation-supported initiative associated with UNC Charlotte and focused on grid modernization, advanced manufacturing, workforce development, and the infrastructure needed to support the next generation of electricity demand. 

FERC's Directive—and Why It Matters

On July 16, 2026, FERC directed NERC to develop new or modified reliability standards addressing the integration of large computational loads, establish criteria identifying which facilities may be subject to registration, and submit a Phase II work plan addressing additional reliability concerns.[2] 

Importantly, FERC did not act solely because data centers are getting larger or electricity demand forecasts are increasing. Rather, FERC relied heavily on NERC's prior work documenting reliability concerns associated with large computational loads.[3]  Indeed, NERC had already launched several initiatives examining large-load integration and was actively evaluating whether additional reliability requirements were warranted.[4] 

NERC has identified reliability concerns associated with certain large computational loads and has launched multiple initiatives examining their potential impacts on Bulk-Power System reliability.  FERC cited these concerns as evidence that the existing reliability framework may not adequately address the operational realities of modern data-center and computing-related loads.[5]

This point is easy to overlook but critically important: FERC's Order is not merely a reaction to future growth.  It is a response to reliability concerns NERC has already been studying and documenting. In many respects, FERC's Order accelerates and formalizes an issue NERC was already examining, while directing NERC to convert that work into concrete standards-development proposals.

Load: The New Frontier in Reliability Regulation

The Order represents a significant development in FERC's exercise of its reliability authority.  Traditionally, NERC’s Reliability Standards have targeted entities responsible for planning and operating the Bulk-Power System, including transmission and generation owners and operators.  Load itself has generally been treated as an input to the reliability framework rather than the direct subject of regulation.

FERC's Order suggests that this paradigm may be changing.

To be clear, Federal Power Act Section 215(b) grants FERC jurisdiction over “all users, owners and operators of the bulk-power system…for purposes of approving reliability standards[.]”[6] The Order may represent FERC's first effort to evaluate whether a category of electricity consumers directly interconnected to the Bulk-Power System should become directly subject to reliability obligations.[7]   

By directing NERC to evaluate registration criteria and develop standards specifically addressing computational loads, FERC has opened the door to direct reliability obligations for certain large-load facilities.  If NERC ultimately develops registration criteria that capture some data centers or other computational-load facilities, affected entities could become registered NERC entities subject to mandatory reliability standards, compliance obligations, audits, and potential enforcement exposure.

Significance to the Southeast

Although FERC's Order has nationwide implications, it may be especially significant in the Southeast. States such as Georgia, North Carolina, South Carolina, Tennessee, and Virginia have become leading destinations for data-center investment, advanced computing infrastructure, and large-scale industrial growth. Utilities throughout the region are evaluating significant transmission, generation, and distribution investments needed to accommodate new load growth. These same trends are driving many of the planning, technology-development, and infrastructure challenges that the CGE seeks to address. 

In a recent interview, CGE co-principal investigator Robert Cox observed that one of the industry's central challenges is not merely developing new technologies but ensuring that utilities can adopt and deploy them while maintaining reliability and affordability.[8] FERC's Order highlights a closely related challenge: how to accommodate rapidly growing electricity demand without compromising Bulk-Power System reliability.  As data centers, advanced manufacturing facilities, and other large electrical loads expand across the Carolinas, the reliability concerns identified by NERC are likely to become increasingly relevant to many of the industries and infrastructure initiatives that CGE seeks to support.

Practical Considerations for Stakeholders

Although NERC's standards-development process remains in its early stages, stakeholders should begin evaluating how a potential computational-load registration framework could affect future projects and operations.

Data-center developers, large-load customers, investors, and technology companies should monitor whether NERC proposes registration criteria that would subject certain facilities to direct compliance obligations. Utilities and transmission providers should likewise monitor how evolving reliability requirements may affect planning assumptions, operational coordination, and service arrangements with large-load customers.

The proceeding may also influence commercial contracting and risk allocation. If certain computational loads ultimately become subject to NERC registration or related reliability requirements, parties may need to address compliance responsibilities, operational coordination obligations, information-sharing requirements, and associated risks in project development, interconnection, service, and commercial agreements.

The ultimate scope of any future standards remains uncertain. Nevertheless, stakeholders developing projects that depend upon large electrical loads should closely monitor NERC's standards-development process.

Conclusion

FERC's latest directive may ultimately prove to be one of the most consequential reliability initiatives in recent years. For decades, reliability standards have focused primarily on the traditional operators of the Bulk-Power System. FERC's Order raises the possibility that certain large-load facilities, including some of the data centers powering the digital economy, may increasingly be viewed as reliability-critical actors whose operational characteristics warrant direct regulatory attention. For stakeholders across the Southeast—and particularly in the rapidly growing Carolinas market—that shift could prove as important as the standards NERC ultimately develops.