The National Science Foundation has awarded UNC Charlotte up to $160 million over the next decade to launch the NSF Grid Modernization Engine in the Carolinas (“Carolinas Grid Engine”)—one of only 12 Regional Innovation Engines nationwide. The Engine will develop, test, commercialize, and deploy technologies to modernize the electric grid across 36 counties in North and South Carolina.

With more than 100 partners, including Duke Energy, Dominion Energy, Santee Cooper, Siemens Energy, Honeywell, Nucor, EPRI, Clemson University, Joules Accelerator, ElectriCities members, and multiple state agencies, the Engine represents a transformational federal investment in the region's energy future.

Public announcements emphasize innovation, commercialization, workforce development, and economic impact. But the Engine's success will also depend on a regulatory framework capable of supporting the deployment of new technologies into utility operations across both states. Many Engine-related activities—including advanced transmission technologies, grid-enhancing technologies, energy-storage systems, hybrid transformers, sensor networks, and AI-enabled operational tools—intersect directly with oversight by the Federal Energy Regulatory Commission (FERC), the North American Electric Reliability Corporation (NERC), and SERC Reliability Corporation (SERC). For organizations participating in the Engine, understanding these regulatory considerations will be critical as technologies move from research and demonstration to operational deployment.

FERC Oversight: Key Federal Authorities Shaping Grid-Technology Deployment

Recent FERC initiatives will influence how many Engine-related technologies are evaluated, interconnected, and ultimately deployed on the electric grid. These developments include Order No. 2023 (RM22-14-000) on interconnection reform; the June 18, 2026 Section 206 show-cause orders (Items E-7 through E-12) addressing large loads and alternative transmission technologies; updated cybersecurity and virtualization rules (RM24-8-000; RM25-8-000; RD25-8-000); FERC's grid-enhancing technology proceedings—including the Dynamic Line Ratings inquiry (AD19-15-000) and the Ambient-Adjusted Line Ratings NOPR (RM21-17-000)—which emphasize improved transmission visibility and operational data; and Order No. 881 (RM20-16-000) on transmission line ratings.

Collectively, these proceedings are helping shape the regulatory landscape for advanced storage systems, sensor networks, AI-enabled operational tools, and other technologies that may emerge from the Carolinas Grid Engine.

Interconnection Reform and Grid-Support Functions

Pilot projects that introduce non-traditional grid-support functions—including advanced storage systems, power-flow controllers, and AI-driven forecasting tools—may affect interconnection studies, queue processes, and system-impact analyses. FERC's recent reforms place increased emphasis on transparency, modeling accuracy, and timely processing of new technologies, making interconnection strategy an increasingly important consideration for organizations developing and deploying innovative grid solutions.

NERC/SERC Reliability and Cybersecurity Considerations

As emerging technologies move from research environments into utility operations, reliability and cybersecurity considerations become increasingly important. Even where municipal utilities and cooperatives operate outside the Bulk Electric System (BES), NERC's supply-chain, cybersecurity, and data-governance expectations increasingly influence vendor management, operational technology (OT) security, and coordination with neighboring transmission operators.

Technologies developed or deployed through the Engine—including storage systems, advanced sensors, communications platforms, and cloud-enabled analytics—may require enhanced controls for secure data sharing, vendor oversight, and operational risk management. Organizations that address these issues early will be better positioned to integrate new technologies into utility environments.

State-Level Coordination Across the Carolinas

Although municipal and cooperative utility activities often fall outside direct FERC and state commission jurisdiction, Engine-related deployments may involve joint projects, infrastructure siting, permitting requirements, or cost-sharing arrangements that require coordination with state agencies, economic-development organizations, and other governmental entities in both North and South Carolina.

As Engine participants pursue opportunities across the region, state-level regulatory considerations will remain an important component of successful project development and deployment.

How Nelson Mullins Can Help

Participants in the Carolinas Grid Engine will encounter a wide range of federal, regional, and state regulatory considerations as technologies move from research and demonstration into operational deployment.

Nelson Mullins advises renewable energy companies, public-power entities, electric cooperatives, technology companies, manufacturers, developers, investors, and research institutions on navigating these requirements. Our Energy Regulatory practice spans the full regulatory landscape, including FERC compliance and interconnection strategy, NERC reliability and cybersecurity obligations, SERC regional coordination and enforcement matters, and interactions with utility regulators and other state agencies throughout North and South Carolina.

Our team includes attorneys with deep experience advising clients on the federal, regional, and state regulatory issues that shape how innovative energy technologies are developed, deployed, and integrated into the modern electric grid.