Why It Matters
All five members of the Federal Energy Regulatory Commission (FERC) appeared before the Senate Energy and Natural Resources Committee on Wednesday, July 22, for an oversight hearing dominated by a single question: who pays when data centers connect to the grid?
Republicans credited the commission for acting market by market rather than through a national mandate. Democrats warned that existing customers should not subsidize tech companies' grid connections, and that federal permitting is tilting against renewables.
The Big Picture
FERC oversees interstate transmission and wholesale markets for electricity and natural gas, along with pipelines and hydroelectric power, and is charged with keeping rates just and reasonable.
On June 18, FERC ordered the country's six regional grid operators to justify existing tariffs or propose changes governing how large loads connect to the transmission system, opening a separate proceeding for each market under section 206 of the Federal Power Act.
Chairman Laura Swett, designated to the post by President Trump in October 2025 after 15 years litigating FERC matters, told the committee the orders put those markets on a shot clock. Responding to Sen. Cindy Hyde-Smith (R-MS), she said the commission is pairing them with case-by-case review of the utility-hyperscaler interconnection agreements that arrive almost daily. She has also convened an internal task force on grid-enhancing technologies, noting that utilities have begun deploying them and cost-saving data is now available.
Commissioner David Rosner said the orders rest on four pillars: protecting consumers, transparency, reliability, and innovation. He testified that utilities building network upgrades to serve a large load must disclose that spending so state regulators can assign it to the right customer, noting more than 30 states have large load rate structures in place or in development. Commissioner Judy Chang said the cost-shifting provisions position the commission to charge data center-driven upgrades to the loads that cause them.
Sen. Martin Heinrich (D-NM) said a report he released found the administration is slow-walking offshore wind projects, raising economy-wide utility costs by roughly $11.6 billion per year. He warned that FERC's independence must be preserved for its consumer-protection mission to work.
That warning lands against the Supreme Court's June 29 decision in Trump v. Slaughter, which stripped for-cause removal protections from commissioners at independent agencies in a 6-3 ruling. Sen. Maria Cantwell (D-WA) criticized the decision, and former commissioners of both parties have cautioned that FERC's statute carries identical protections.
What's Next
Grid operators and transmission owners must respond to the show cause orders or identify tariff changes by Monday, August 17, with requests to pause a proceeding due Monday, August 3.
Sen. Steve Daines (R-MT) has asked FERC and three federal departments to open a rulemaking on sections 4(e) and 18 of the Federal Power Act. Sen. Catherine Cortez Masto (D-NV) has reintroduced the Energy Consumer Protection Act with Cantwell, which would let the commission ban or limit repeat market manipulators.
The Bottom Line
The hearing produced more agreement than the party-line framing suggests. Every commissioner backed streamlining hydropower licensing, and nobody defended shifting data center costs onto households. The disagreement is over enforcement mechanisms.
The commission has told six markets to prove their tariffs protect ratepayers, and those filings will show whether case-by-case review holds when the money at stake belongs to the fastest-growing customers in the country. If the responses come back thin, FERC has promised to write the rules itself, a fight it has so far avoided.
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