Official text as published. Use Ctrl+F / Cmd+F to search within the document.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4559 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
2d Session
S. 4559
To amend the Federal Power Act to require the Federal Energy Regulatory
Commission to issue a final rule relating to the interconnection of
large load facilities with the transmission system, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 18, 2026
Mr. Schiff introduced the following bill; which was read twice and
referred to the Committee on Energy and Natural Resources
_______________________________________________________________________
A BILL
To amend the Federal Power Act to require the Federal Energy Regulatory
Commission to issue a final rule relating to the interconnection of
large load facilities with the transmission system, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Energy Cost Fairness and Reliability
Act of 2026''.
SEC. 2. SENSE OF CONGRESS.
It is the sense of Congress that--
(1) the United States has long been a global leader in
science, technology, and innovation, which are essential to
economic growth, national security, and global competitiveness;
(2) artificial intelligence requires substantial computing
power, storage, and networking capacity to train models and
process data at scale;
(3) the rapid and significant increase in load growth
driven by data centers, growing electrification, the onshoring
of domestic manufacturing, and other changes in industry and
the economy poses serious challenges to grid resource adequacy
and reliability;
(4) responsible and sustainable investments in energy
infrastructure to account for a significant increase in load
growth can strengthen the energy security of the United States
and ensure that technological growth is compatible with long-
term sustainability;
(5)(A) electricity prices in various regions across the
United States have surged in recent years due to the need for
network upgrades and new energy infrastructure to serve large
loads; and
(B) therefore, increasing load growth threatens to
significantly increase electricity rates for ratepayers; and
(6) due to the unprecedented proliferation of large load
facilities, such as data centers seeking to interconnect with
the transmission system, and because of the implications this
proliferation poses to the reliability and stability of the
interstate transmission system, the energy and national
security of the United States, the affordability of electricity
for residential consumers, and the global technological
leadership of the United States, it is necessary for Congress
to address this proliferation and provide direction to the
Commission and the Department.
SEC. 3. MANAGEMENT OF LARGE LOAD FACILITIES.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended
by adding at the end the following:
``SEC. 224. MANAGEMENT OF LARGE LOAD FACILITIES.
``(a) Definitions.--In this section:
``(1) Colocated.--The term `colocated', with respect to a
large load facility, means that the large load facility is
physically connected to, and has contractual arrangements to be
served by, the facilities of an existing or planned generating
facility on the generating facility's side of the point of
interconnection to the interstate transmission system.
``(2) Commission.--The term `Commission' means the Federal
Energy Regulatory Commission.
``(3) Curtailable.--
``(A) In general.--The term `curtailable', with
respect to a large load customer, means that the large
load customer is capable of reducing or shifting
electrical demand at the applicable large load facility
in response to a request from the applicable electric
utility or transmission provider--
``(i) to maintain grid reliability;
``(ii) to manage transmission congestion;
``(iii) to meet the operational needs of
the transmission provider; or
``(iv) for other reasons, as the
transmission provider determines necessary.
``(B) Methods of reducing or shifting demand.--The
reduction or shifting of electrical demand as described
in subparagraph (A) may be accomplished through--
``(i) the deployment of on-site energy
storage or other technologies that allow
continued operations while reducing grid draw;
or
``(ii) voluntary reduction of operations,
including shifting operations to facilities in
other regions, during requested periods.
``(4) Demand flexibility.--The term `demand flexibility'
means the capability of the electrical load or on-site
distributed energy resources of a large load customer to
reduce, shed, shift, or modulate electricity consumption or
generation in response to external signals, including price
changes, grid reliability needs, or energy availability.
``(5) Department.--The term `Department' means the
Department of Energy.
``(6) Generator interconnection queue.--The term `generator
interconnection queue' means the ordered list of valid
interconnection requests maintained by a transmission provider,
pursuant to a tariff approved by the Commission, for purposes
of studying, processing, and deciding whether to approve the
interconnection of generating facilities to the transmission
system.
``(7) Labor organization.--The term `labor organization'
has the meaning given the term in section 2 of the National
Labor Relations Act (29 U.S.C. 152).
``(8) Labor peace agreement.--The term `labor peace
agreement' means a written agreement between an employer and a
labor organization through which the employer guarantees that--
``(A) the employer will be neutral regarding any of
the employees of the employer seeking to be represented
by the labor organization; and
``(B) if employees seek to be represented by a
labor organization, the employer shall recognize the
labor organization as the exclusive bargaining
representative on a showing that a majority of the
employees choose to be represented by the labor
organization.
``(9) Large load customer.--The term `large load customer'
means the 1 or more entities using power at a large load
facility.
``(10) Large load facility.--The term `large load facility'
means--
``(A) a facility the peak demand of which exceeds
50 megawatts; or
``(B) an aggregation of facilities the peak demand
of which exceeds 50 megawatts at a single site (as
determined by the Commission, taking into consideration
ownership of the facilities).
``(11) Load interconnection queue.--The term `load
interconnection queue' means the ordered list of valid
interconnection requests maintained by a transmission provider,
pursuant to a tariff approved by the Commission, for purposes
of studying, processing, and deciding whether to approve the
interconnection of large load facilities to the transmission
system.
``(12) National laboratory.--The term `National Laboratory'
has the meaning given the term in section 2 of the Energy
Policy Act of 2005 (42 U.S.C. 15801).
``(13) Registered apprenticeship program.--The term
`registered apprenticeship program' means an apprenticeship
program registered under the Act of August 16, 1937 (commonly
known as the `National Apprenticeship Act') (50 Stat. 664,
chapter 663; 29 U.S.C. 50 et seq.).
``(14) Secretary.--The term `Secretary' means the Secretary
of Energy.
``(15) Transmission provider.--The term `transmission
provider' means the applicable provider of transmission
services, which may include an Independent System Operator, a
Regional Transmission Organization, or a public utility that
provides transmission services.
``(b) Standard Interconnection Procedures.--Not later than 1 year
after the date of enactment of this section, the Commission, in order
to establish a formal interconnection queue system for large loads to
be regulated by the Commission, shall issue 1 or more final rules to
establish standard interconnection procedures for large loads
requesting to interconnect to the interstate transmission system, which
shall require the following:
``(1) Costs of interconnection studies.--With respect to
the costs of interconnection studies--
``(A) any large load customer seeking
interconnection to the interstate transmission system
shall pay 100 percent of the costs of interconnection
studies; and
``(B) any large load customer that fails to satisfy
the payment obligations described in subparagraph (A)
shall be prohibited from interconnection or receiving
transmission service until full compliance with that
subparagraph.
``(2) Network upgrades.--Network upgrades shall be assigned
to large load customers through the interconnection study
process that is part of the load interconnection queue system
established under this subsection.
``(3) Reliability standards.--Interconnection to the
interstate transmission system for a large load facility shall
not proceed until the applicable transmission provider
determines that the interconnection would not cause a violation
of any applicable Commission-approved reliability standards (as
defined in section 215(a)).
``(4) Requirements for interconnection.--
``(A) In general.--Interconnection to the
transmission system shall not be approved for a large
load customer unless the large load customer satisfies
the following criteria:
``(i) Demand flexibility and
curtailability.--The large load customer--
``(I) is technically capable of
exercising demand flexibility and being
curtailable, as evidenced by
satisfaction of--
``(aa) the minimum criteria
established under subparagraph
(B); and
``(bb) any minimum
technical standards established
or approved under subparagraph
(C); and
``(II) enters into a binding
agreement with the transmission
provider to exercise demand flexibility
and be curtailable.
``(ii) New generating resources.--The large
load customer demonstrates and guarantees that
the large load customer or the operator of the
applicable new large load facility will
construct, arrange to have constructed, or
otherwise arrange for new generating
facilities, which may include power produced or
made available by distributed energy resources
(including virtual power plants) that the large
load customer has created or has worked with
the transmission provider to arrange or
coordinate, to supply the power needed by the
new large load facility, with such power being
deliverable to the large load facility and
temporally matching its capacity needs.
``(B) Minimum criteria for demand flexibility and
curtailability.--The Commission shall issue standards
or guidelines, or otherwise approve standards proposed
by the applicable transmission provider through a
tariff to be reviewed by the Commission, to establish
minimum criteria necessary for a large load facility or
category of large load facilities to qualify as
sufficiently capable of exercising demand flexibility
and sufficiently curtailable for purposes of
subparagraph (A)(i)(I).
``(C) Minimum technical standards.--If the
Commission determines necessary, the Commission shall
establish minimum technical standards, or approve
minimum technical standards established by transmission
providers, for system-protection facilities and
automated load-shedding equipment necessary to verify
and execute the capabilities to exercise demand
flexibility and be curtailable, as described in
subparagraph (A)(i)(I).
``(5) Prioritization within load interconnection queues.--
``(A) In general.--Within a load interconnection
queue, an interconnection request from a large load
customer shall be prioritized if the large load
customer satisfies any 1 or more of the following
criteria:
``(i) Battery backup.--The large load
customer demonstrates and guarantees that the
large load customer or the operator of the
applicable new large load facility will
implement a battery energy storage system to
use as primary backup generation for the large
load facility, with sufficient capacity to meet
the backup needs of the large load facility
during periods of outages or curtailments.
``(ii) Construction.--The large load
customer demonstrates and guarantees that, in
the construction of the applicable new large
load facility and any new energy supply
resource that the large load facility brings to
the electric grid--
``(I) all laborers and mechanics
employed by the large load customer and
contractors and subcontractors of the
large load customer in the performance
of construction are paid wages at rates
not less than those prevailing on
projects of a character similar in the
locality in which the construction
project is located, as most recently
determined by the Secretary of Labor in
accordance with subchapter IV of
chapter 31 of title 40, United States
Code; and
``(II) all contractors and
subcontractors of the large load
customer use registered apprentices
participating in registered
apprenticeship programs.
``(iii) Labor peace agreement.--The large
load customer ensures that each owner or
operator of a new energy supply resource that
the applicable new large load facility brings
to the electric grid has agreed to enter into a
labor peace agreement with respect to the
operation and maintenance of the energy supply
resource.
``(B) Requirement.--A transmission provider shall
endeavor to complete the interconnection study process
for a large load customer that satisfies the criteria
for prioritization under this paragraph before other
large load customers that do not satisfy the criteria
for such prioritization.
``(6) Non-firm transmission access on an as-available
basis.--Transmission providers shall provide to colocated large
load facilities non-firm transmission access to the
transmission system for the purpose of withdrawing electric
energy from the transmission network on an as-available basis,
subject to the condition that such non-firm transmission
service shall be--
``(A) subject to curtailment or interruption before
firm network or point-to-point transmission service, in
accordance with the open access and reliability
standards of the Commission; and
``(B) priced to reflect the non-firm nature of such
service.
``(7) Injection rights on a non-firm basis.--Transmission
providers offer to colocated large load facilities injection
rights without the need for deliverability studies if the
injection will occur on a non-firm basis.
``(c) Protection of Grid Reliability.--The Commission shall require
transmission provider tariffs provided to the Commission to specify the
following:
``(1) An existing generating facility operated by an
interconnection customer may not, as a result of any request of
the interconnection customer to modify its interconnection
service level for such existing generating facility, withdraw
any of its capacity to begin serving a large load facility if
the withdrawal of capacity from the existing generating
facility to serve a large load facility would result in a loss
of capacity to serve customers other than the large load
facility without a new generation resource being interconnected
to the grid to compensate for such loss of capacity.
``(2) An existing generating facility operated by an
interconnection customer may not, as a result of any request of
the interconnection customer to modify its interconnection
service level for such existing generating facility, withdraw
any of its capacity to begin serving a large load facility
until all modifications to interconnection facilities and
network upgrades that the transmission provider determines to
be necessary to maintain reliability for existing customers are
carried out and placed in commercial operation.
``(d) Cost Recovery.--
``(1) Network upgrades.--
``(A) In general.--Not later than 1 year after the
date of enactment of this section, the Commission shall
issue a final rule requiring transmission providers to
ensure that a large load customer seeking
interconnection to the interstate transmission system
shall be responsible for 100 percent of the network
upgrades that are assigned to the large load customer
pursuant to 1 or more interconnection studies,
including any additions, modifications, or upgrades to
the interstate transmission system at or beyond the
point of interconnection that, in the determination of
the transmission provider, are required--
``(i) to accommodate the interconnection;
or
``(ii) to maintain the reliability or
operational integrity of the transmission
system.
``(B) Nonrefundable payments.--All payments made by
a large load customer to cover the costs of network
upgrades described in subparagraph (A) shall be
nonrefundable.
``(C) Prohibition.--The Commission shall not
approve any tariff submitted to the Commission for
review to include any crediting mechanism, refund, or
offset that allows for the costs of network upgrades
described in subparagraph (A) to be--
``(i) recovered from any transmission
customer other than the applicable large load
customer described in that subparagraph; or
``(ii) credited against future transmission
or retail service charges.
``(D) Commission-jurisdictional payment
mechanism.--
``(i) In general.--The costs of network
upgrades described in subparagraph (A) shall be
directly assigned to the applicable large load
customer through a Commission-jurisdictional
payment mechanism, such as--
``(I) a non-refundable upfront
payment;
``(II) a structured surcharge that
may be paid over time; or
``(III) any other cost-assignment
mechanism that is within the
jurisdiction of the Commission.
``(ii) Inclusion in open access
transmission tariff.--The Commission may
require that payments to cover costs described
in clause (i) be included in each applicable
open access transmission tariff.
``(iii) Savings provision.--The payment of
network upgrade costs described in clause (i)
through a Commission-jurisdictional payment
mechanism described in that clause shall not
preempt the authority of a State commission to
regulate the retail rates, terms, or conditions
of electric service provided to the applicable
load by a retail utility.
``(2) Colocated large load facilities.--For a colocated
large load facility--
``(A) the applicable large load customer shall be
assessed charges on a gross-demand basis for ancillary
services and black start service provided through the
interstate transmission system if the colocated
generating facility is interconnected to the interstate
transmission system, even if the colocated large load
facility withdraws zero net energy from the interstate
transmission system; and
``(B) the existence of on-site generation, energy
storage, or other behind-the-meter resources shall not
relieve a colocated large load facility of cost
responsibility under subparagraph (A) if the facility
remains interconnected with, synchronized to, or
reliant upon the interstate transmission system for
reliability, backup service, or ancillary services.
``(3) Review of cost allocation methodologies.--In
determining the justness and reasonableness of any rate,
charge, term, or condition of a tariff or tariff amendment
filed under section 205, the Commission shall, consistent with
State authority, review the cost allocation methodologies to
ensure that the costs of transmission services, network
upgrades, or related facilities necessitated by the
interconnection or operation of large load facilities are not
shifted to other customers, including by taking into account
the ultimate impact of rates under the jurisdiction of the
Commission on downstream retail ratepayers.
``(4) Compensation for certain generation.--Energy
generated by a colocated generating facility that is in excess
of the amount consumed by the colocated large load facility and
that is injected into the interstate transmission system shall
be compensated at the applicable wholesale locational marginal
price or the avoided cost rate, in accordance with the relevant
tariff of the transmission provider that has been filed with
and approved by the Commission.
``(e) Queue Management Best Practices.--
``(1) In general.--Not later than 1 year after the date of
enactment of this section, the Commission shall initiate a
rulemaking to revise the pro forma Large Generator
Interconnection Procedures promulgated pursuant to section
35.28(f) of title 18, Code of Federal Regulations (or a
successor regulation), to require public utility transmission
providers to share and employ, as appropriate, queue management
best practices with respect to the use of computing
technologies, such as artificial intelligence, machine
learning, or automation, in evaluating and processing
generating facility interconnection requests within a generator
interconnection queue, in order to expedite study results with
respect to those requests.
``(2) Technical assistance.--Subject to the availability of
appropriations, the Secretary shall provide to transmission
providers technical assistance with respect to the
implementation of any best practices established by the
Commission under paragraph (1), as the Secretary determines to
be appropriate.
``(f) Large Load Forecasting.--The Commission shall require that,
in at least 1 category of load forecast utilized by a transmission
provider for estimating future energy demand or making grid planning
decisions, a large load facility may be included in the forecast only
if the large load facility is able to provide proof of viable
demonstration of commercial or operational commitment pursuant to
objective criteria set forth in a Commission-approved tariff, which may
include--
``(1) an energy or transmission service agreement;
``(2) credit or collateral support;
``(3) significant infrastructure investment;
``(4) a long-term generation supply commitment; or
``(5) any other comparable demonstration of commitment
approved by the Commission.
``(g) Interconnection and Study Process Discipline.--
``(1) In general.--Notwithstanding any other provision of
law, the Commission shall require each transmission provider,
as a condition of accepting and processing an interconnection
request, transmission service request, or comparable request
from a large load facility, to impose--
``(A) study deposits sufficient to cover the costs
of system impact, facilities, or comparable studies;
``(B) readiness or milestone payments tied to
progression through the study and interconnection
process; and
``(C) withdrawal penalties designed to ensure that
a large load facility that withdraws from such process
bears an appropriate share of the costs imposed on the
transmission provider and other customers.
``(2) Requirement.--The requirements established under
paragraph (1) shall be designed--
``(A) to discourage speculative requests; and
``(B) to reduce study delays and restudies.
``(h) Tariff Revisions; Transition Period.--
``(1) Tariff revisions.--Not later than 180 days after the
effective date of each final rule issued under subsection (b),
each transmission provider subject to the jurisdiction of the
Commission shall submit to the Commission for approval any
tariff amendments necessary to effectuate the rule.
``(2) Transition period.--As part of each rulemaking
proceeding required of the Commission under this section, the
Commission shall ensure that there is a reasonable transition
period for affected entities (as determined by the Commission),
while seeking to avoid disruptions to existing projects or
projects that are significantly underway.
``(3) Requirement.--On and after the effective date of the
final rules issued under subsection (b) to establish the load
interconnection queue system described in that subsection, a
large load facility may only interconnect with the interstate
transmission system once it has been approved through the
applicable load interconnection queue system.
``(i) DOE Data Collection.--
``(1) In general.--The Secretary, in accordance with
section 13 of the Federal Energy Administration Act of 1974 (15
U.S.C. 772), may require owners or operators of data centers to
submit to the Secretary such data as is necessary to enable the
Secretary--
``(A) to identify trends in new data center
requests and commissioning;
``(B) to identify trends in energy and water
performance, including cooling and on-site generation,
and flexibility in operations;
``(C) to assess actual energy use associated with
artificial intelligence activities, including the
training of artificial intelligence models and
inference operations;
``(D) to establish benchmarks of--
``(i) current data center energy and water
use by data center type and function; and
``(ii) the operational flexibility of load
by data center type;
``(E) to engage in quarterly tracking of trends in
data center energy demand relating to artificial
intelligence; and
``(F) to support the development of refined models
for projecting future energy needs and load shapes
associated with data center workloads.
``(2) Data protection.--
``(A) In general.--The Secretary shall protect any
confidential business information that is submitted by
a data center owner as required under paragraph (1).
``(B) FOIA exemption.--Information described in
subparagraph (A) shall be exempt from disclosure
under--
``(i) section 552(b)(4) of title 5, United
States Code (commonly known as the `Freedom of
Information Act'); and
``(ii) any provision of State, Tribal, or
local freedom of information law, open
government law, open meetings law, open records
law, sunshine law, or similar law requiring
disclosure of information or records.
``(j) DOE Artificial Intelligence Testbed.--
``(1) Establishment.--Not later than 180 days after the
date of enactment of this section, the Secretary shall
establish a data-center-scale artificial intelligence testbed
at a National Laboratory that shall be complementary to, but
distinct from, the current set of high-performance computing
facilities operated by Department.
``(2) Requirement.--The testbed established under paragraph
(1) shall allow researchers from the National Laboratories,
academia, and industry to collaborate in the development and
assessment of various aspects of artificial intelligence,
including--
``(A) algorithms for energy-efficient or energy-
flexible artificial intelligence training and inference
to advance the artificial intelligence capabilities of
the United States and build on the success of
comparable public-private efforts that have accelerated
advances in high-performance computing;
``(B) technology hardware and control systems
relating to power supply, cooling, and computing system
configuration;
``(C) grid integration, load flexibility, efficient
grid management, and strategies for protecting or
enhancing grid reliability, resource adequacy, or
energy affordability; and
``(D) advancing or de-risking new technologies to
advance the efforts described in subparagraphs (A)
through (C).
``(3) Report.--
``(A) In general.--Not later than 1 year after the
date of enactment of this section, the Secretary shall
submit to Congress and the Commission a report compiled
using knowledge gained and lessons learned from--
``(i) the testbed established under
paragraph (1); and
``(ii) any other relevant projects that are
ongoing at the Department and the National
Laboratories.
``(B) Collaboration.--In compiling the report under
subparagraph (A), the Secretary shall work with--
``(i) the National Laboratories;
``(ii) Federal partners, such as the
Commission;
``(iii) academia; and
``(iv) industry.
``(C) Assessments.--The report under subparagraph
(A) shall assess--
``(i) the scale of load growth being driven
by the proliferation of data center
infrastructure, including significant regional
differences;
``(ii) how that load growth will affect
grid reliability, resource adequacy, and
national security;
``(iii) how electric utilities and
regulators obtain information to verify when
and whether prospective large load facilities
will reach commercial operation;
``(iv)(I) how utilities and regulators
determine and apply consistent and objective
screening criteria for interconnection
requests; and
``(II) how utilities and regulators are
attempting to deter speculative or duplicative
interconnection requests for large loads;
``(v) innovative technologies for--
``(I) the reduction of power and
water utilized by data centers;
``(II) the utilization of waste
heat, including for heating residential
homes; and
``(III) facility-level electricity
supply; and
``(vi) the usage and ability of demand
response and demand flexibility by data center
facilities to alleviate stresses on grid
resource adequacy.
``(D) Recommendations.--The report under
subparagraph (A) shall provide recommendations for--
``(i) how load forecasting can be improved
to more accurately determine how the actual
electricity consumption of a large load
facility will compare to its requested level of
interconnection service;
``(ii) how to ensure that large load
interconnection requests--
``(I) are subject to consistent and
objective screening criteria; and
``(II) are not double-counted;
``(iii) hardware and algorithmic
improvements to further reduce energy
consumption relating to artificial
intelligence, including for developing energy-
efficient methods for training and inference of
large language models and other large
artificial intelligence models;
``(iv) policy changes or actions that the
Federal Government may take to ensure quick and
efficient buildout of data infrastructure while
ensuring a buildout that maintains grid
reliability and energy affordability; and
``(v) how the National Laboratories can
facilitate collaboration and information-
sharing to accelerate innovation.
``(E) Commission consideration.--Not later than 180
days after receiving the report under subparagraph (A),
the Commission shall--
``(i) decide whether to implement any
recommendations or act on any findings in that
report; and
``(ii) initiate a rulemaking proceeding or
take other appropriate action, if applicable.
``(F) Publication of topline data.--
``(i) In general.--The Secretary shall
publish on the website of the Department
aggregated topline data and conclusions from
the report under subparagraph (A).
``(ii) Requirement.--In carrying out clause
(i), the Secretary shall ensure that no data
that could be attributed to a single private
entity is made available to the public.
``(k) Savings Provision.--Nothing in this section shall be
construed to authorize the Commission to regulate retail electricity
rates, charges, or terms of service, which shall remain subject to the
jurisdiction of the States.''.
<all>