Understanding Large Load Interconnection

This guide explains the process that transmission providers and large load customers, such as data centers, use to connect loads exceeding 20 megawatts (MW) to the electric grid. It details the six-step interconnection process, the distinction between customer interconnection facilities and network upgrades, and the regulatory roles of FERC and state PUCs in cost allocation.

• Large loads, defined as those exceeding approximately 20 megawatts (MW), such as data centers, require direct connection to the transmission system rather than the electricity distribution system to avoid overloading distribution capabilities or creating inefficiencies.
• The load interconnection process consists of six conceptual steps: (1) Preliminary Inquiry and Scoping, (2) Interconnection Request, (3) Feasibility Study, (4) System Impact Study (SIS), (5) Facilities Study, and (6) Interconnection Agreement. The process can take from several months to several years to complete.
• The System Impact Study (SIS) is the most critical phase of the process, as it uses technical analysis to determine required upgrades and assign preliminary cost responsibility.
• Interconnection triggers two distinct types of upgrades: customer interconnection facilities, which provide a direct connection between the load and the point of interconnection (POI) and are typically paid for entirely by the customer; and network upgrades, which ensure the broader grid can reliably serve the new load.
• Network upgrades are identified by simulating power flows (including peak summer, peak winter, and light spring hours) to check for violations of North American Electric Reliability Corporation (NERC) standards.
• Cost recovery for transmission upgrades involves a multi-tiered regulatory process: the Federal Energy Regulatory Commission (FERC) approves regional cost allocation and annual recovery for transmission owners, while state Public Utility Commissions (PUCs) approve how local utilities allocate those costs to retail customer classes.
• The load interconnection process is distinct from other grid functions: it does not assess generation capacity, set ongoing electricity rates, or identify system-wide transmission needs across the entire grid operator's footprint.

APA

RMI (2026). Understanding Large Load Interconnection. https://rmi.org/resources/understanding-large-load-interconnection/

Chicago

RMI. Understanding Large Load Interconnection. 2026. https://rmi.org/resources/understanding-large-load-interconnection/.

Wikipedia

{{cite report |author=RMI |title=Understanding Large Load Interconnection |date=14 April 2026 |url=https://rmi.org/resources/understanding-large-load-interconnection/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2026understanding, author = {{RMI}}, title = {{Understanding Large Load Interconnection}}, institution = {RMI}, year = {2026}, month = apr, url = {https://rmi.org/resources/understanding-large-load-interconnection/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }