NERC moves to bring large data center loads within mandatory reliability framework

On October 21, 2026, the North American Electric Reliability Corporation (NERC) petitioned the Federal Energy Regulatory Commission (FERC) to approve new registration criteria for owners and operators of large computational load sites. The Petition would add two new functional entity types to NERC’s Compliance Registry: Computational Load Owner (CLO) and Computational Load Operator (CLOP). Entities registered in either function would become subject to mandatory Reliability Standards under the Federal Power Act (FPA).

The Petition responds to FERC’s July 16, 2026 order directing NERC to submit registration criteria and an initial set of computational load Reliability Standards by December 31, 2026, and to file a work plan for additional “Phase II” standards by March 1, 2027. The NERC Board of Trustees adopted the initial standards on October 26, 2026. Those standards and their implementation plans are on a separate track and require their own FERC approval.

Until now, data centers have been treated as utility customers, or “load,” and NERC’s reliability framework has reached principally generators and the transmission system. If FERC approves the Petition, qualifying data center owners and operators would for the first time be subject to NERC registration, audits, and enforcement.

Below, we provide context for the Petition, discuss its proposed criteria, and offer key takeaways.

Background

NERC is the FERC-certified Electric Reliability Organization. It develops and enforces mandatory Reliability Standards for the bulk power system (BPS), subject to FERC approval and oversight. NERC has identified data centers, artificial intelligence (AI) compute clusters, and cryptocurrency mining operations as software-controlled loads that can change consumption rapidly and unpredictably. Large, simultaneous reductions in consumption during grid disturbances can affect voltage, frequency, and grid stability. In a March 20, 2026 letter to FERC, NERC pointed to grid events in Virginia and Texas in which large data center loads responded to, and amplified, grid instability.

In March 2026, NERC’s Large Loads Working Group concluded that existing Reliability Standards and industry processes are inadequate for the reliable integration of emerging large loads. NERC’s gap analysis also found that utilities and other registered entities cannot fully address these risks on their own, in part because grid planners and operators have had difficulty obtaining data from large-load facilities. NERC therefore concluded that direct obligations for computational load owners and operators are needed. Before filing the Petition, NERC took public comment on proposed registration criteria from April 1 to May 15, 2026, and on revised criteria from August 19 to September 18, 2026.

The proposed registration criteria

The Petition answers two core questions: which facilities are covered, and which entities at those facilities must register. It does so by defining a new type of facility, the Computational Load Site; setting size and voltage thresholds that determine when a site is covered; and assigning registration to the entities that own and operate it. Registration does not itself impose operational requirements. Instead, it determines who will be bound by the computational load Reliability Standards that NERC is advancing on a parallel track. Each element of the criteria is discussed below.

New functional entities

The Petition would amend Appendices 2, 5A, and 5B of NERC’s Rules of Procedure. A CLO would be the entity that owns and maintains a Computational Load Site, and a CLOP would be the entity that operates one. In some circumstances, a single entity may be registered for both functions.

Computational load site

A “Computational Load Site” would be one or more buildings, structures, or installations at a single location that 1) primarily contain information technology infrastructure used for creating, executing, and delivering software applications and services; artificial intelligence training, deployment, and delivery; cryptocurrency mining; or other computational activities at a data center; and 2) are supplied through electrical equipment that is connected to the BPS.

Thresholds

Registration would apply to the owner or operator of a Computational Load Site that has a total connected load of 50 MW or more that is supplied through electrical equipment connected at 100 kV or higher at one or more points of connection. Candidates for registration must meet all of the criteria in Appendix 5B. Total connected load includes supporting electrical systems, and NERC would assess each site’s actual configuration.

Related Reliability Standards

Registration would make CLOs and CLOPs responsible for complying with applicable Reliability Standards. The initial standards adopted by the NERC Board address demand forecasts, models of facility electrical behavior, coordination with grid operators, and responses to grid disturbances. Further work is underway on computational load performance, planning and reliability studies, event reporting, and model quality. Compliance obligations would begin on the effective dates set in the FERC-approved implementation plans.

Key takeaways and implications

• Broad coverage. Although the 50 MW and 100 kV thresholds are intended to focus registration on sites posing greater aggregate risks to BPS reliability, NERC estimates that they would capture approximately 68,288 MW, or roughly 86 percent of projected computational load, by the end of 2027.


• Grid-side voltage test. The 100 kV threshold generally looks to the high-voltage side of the equipment supplying the site, regardless of who owns that equipment. A lower-voltage service arrangement or on-site generation does not guarantee that grid-connected sites will be out of scope.


• Campus-level aggregation. A campus spanning multiple parcels or points of connection may be treated as a single site. Phased developments may therefore cross the 50 MW threshold as they build out.


• Registration follows ownership and operational control, not contractual labels. The CLO and CLOP functions may be performed by different entities, and in some circumstances a single entity may be registered for both. Registration turns on who owns and maintains the site and who controls its electrical operations. Contractual allocations of responsibility do not, by themselves, eliminate an entity’s NERC registration obligations.


• Enforcement exposure. Once the applicable standards are approved and effective, registered entities would be subject to NERC audits and enforcement, including potential penalties under the FPA. Under FPA section 215(e), FERC, or NERC subject to FERC review, may impose penalties for violations of Reliability Standards that bear a reasonable relation to the seriousness of the violation and account for the violator’s efforts to remedy it. Following FERC’s January 2025 inflation adjustment, the statutory maximum is $1,584,648 per violation per day.


• No new grid rights. Registration would not grant interconnection or transmission rights, and registering as a load owner or operator would not make a data center a generator.

Next steps

Comments and motions to intervene in FERC Docket No. RR27-1-000 are due November 20, 2026, at 5:00pm ET. NERC has requested expedited approval so that it can begin outreach and help companies prepare for registration.

Data center owners, operators, developers, tenants, and investors are encouraged to screen existing, under-construction, and planned sites against both thresholds, accounting for multiple points of connection. They may also wish to identify which entities would register for each function and review leases; colocation, construction, operating, and interconnection agreements; and transaction documents to allocate registration, data-sharing, audit, and indemnification responsibilities. Engineering and operations teams are encouraged to begin identifying gaps in electrical models, operating data, communications with grid operators, protection systems, and disturbance records. Stakeholders may consider commenting on how the criteria define a site, its owner, and its operator, as those definitions will determine who carries these obligations.

For more information about these developments, please contact the authors.