According to Utility Dive, the Federal Energy Regulatory Commission (FERC) is staring down a monumental 2026, pressured by the Trump administration to accelerate data center grid connections while also enforcing fast-approaching deadlines for its landmark Order 1920 on transmission planning. New Chair Laura Swett has made connecting data centers her top public priority, aligning with White House goals. The agency must also respond by April 30 to a controversial Department of Energy proposal that could expand federal authority over interconnecting large loads like data centers, a move that has sparked fierce pushback from state regulators. Simultaneously, FERC is reviewing compliance plans from grid operators for Order 1920, a rule already under legal challenge in the Fourth Circuit court. All this unfolds against a backdrop of spiking capacity auction prices in major grids like PJM, where officials warn of a “crisis stage” for reliability.
FERC independence meets White House priorities
Here’s the thing: FERC is supposed to be an independent agency. But the political heat is turning way up. With two recent Trump appointees and a chair, Laura Swett, who immediately echoed the administration’s data center focus, observers like the R Street Institute’s Devin Hartman believe she’ll track White House priorities more closely than any chair ever. That creates a real tension. The DOE’s October proposal to let FERC oversee data center interconnections is a huge deal—it directly challenges state authority over retail load. State utility commissioners are furious, arguing it upends a decades-old federal-state balance. So FERC has to walk a tightrope: appease an administration that wants action, but not issue a rule that gets immediately smacked down in court. As lawyer Steven Shparber noted, they’ll need to be “very careful” to make any rule “legally durable.” It’s a classic regulatory pickle.
The transmission reform grind
While the data center drama grabs headlines, the less-sexy, absolutely critical work of implementing Order 1920 grinds on. This is the Biden-era rule meant to force grid planners to think 20 years ahead. But now it’s the Trump-era FERC’s job to enforce it. And they are, at least for now—the commission filed a brief defending the rule in court on January 5. The real test is how they handle the compliance plans coming in from grid operators this year. Will FERC under Swett set a high bar, or let regions off easy? Former Chairman Willie Phillips thinks 2026 is “more about implementation and execution rather than new policy reforms.” But implementation is where the rubber meets the road. If they don’t get this right, as Commissioner Judy Chang warned, even speeding up generator interconnections won’t matter because the grid won’t be able to handle the power. It’s all connected.
Markets in crisis and picking winners?
Now, let’s talk about the markets FERC oversees. They’re screaming. PJM, the nation’s biggest grid, is in a “crisis stage,” according to former FERC Chair Mark Christie. Capacity prices are hitting new highs as old plants retire and demand from things like, you guessed it, data centers, skyrockets. So what’s the response? There’s a clear push, analysts say, to find ways to funnel more money to thermal plants—natural gas and coal. This could happen through tweaking capacity accreditation rules or creating new market products that value “fuel security.” Basically, it’s a move to financially prop up the traditional generation fleet. And with the administration’s focus on “energy affordability,” there’s also talk of shifting costs onto renewable resources. It’s a potential major re-engineering of market incentives, all happening under the radar while everyone fights about interconnection rules.
A year of impossible balancing acts
So what does all this add up to? 2026 looks like a year of brutal triage for FERC. Its bandwidth is completely eaten up between two existential tasks: managing the political imperative for data center growth and the technical imperative for a planned, reliable grid. Every move is scrutinized for signs of political alignment or independence. Every rule is a potential court battle. And underneath it all, the physical grid is showing alarming signs of strain. The agency has to navigate federal-state power struggles, defend its own major rules in court, and potentially reshape wholesale markets—all at once. It’s an insane workload. As the infrastructure for this new digital and industrial age gets built out, the reliability of the entire system hinges on these regulatory decisions. For companies deploying critical infrastructure, from data centers to advanced manufacturing, understanding this regulatory flux is key. When it comes to powering industrial computing and control systems, having reliable hardware is just as critical as having reliable power. That’s where specialists like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs, become essential partners, ensuring the physical interface with the grid and these new loads is as robust as the regulatory framework aims to be. The stakes for FERC this year couldn’t be higher. Can it referee the game when the rulebook itself is being rewritten?
