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FERC launches colocation review, plus 6 other open meeting takeaways

The Federal Energy Regulatory Commission on Thursday launched a review of issues related to colocating large loads, such as data centers, at power plants in the PJM Interconnection. “There are tremendous implications for reliability and consumers, and we have to be fair,” FERC Chairman Mark Christie said during the agency’s monthly meeting. At the same […]

The Federal Energy Regulatory Commission on Thursday launched a review of issues related to colocating large loads, such as data centers, at power plants in the PJM Interconnection.

“There are tremendous implications for reliability and consumers, and we have to be fair,” FERC Chairman Mark Christie said during the agency’s monthly meeting. At the same time, utilities have an obligation to serve new customers, he said.

FERC’s effort to clarify rules for colocated load comes amid a surge in data center development across the United States, partly driven by the growth of artificial intelligence. Colocating data centers at existing power plants provides a potential pathway to bringing data centers online quickly and at lower cost compared with “front of meter” options.

However, new rules governing colocated resources in PJM likely won’t be approved by FERC until early next year, creating a period of uncertainty for independent power producers such as Talen Energy and Vistra by delaying deal announcements with data center operators, Capstone analysts said Thursday.

FERC aims to approve new colocation rules for PJM this year, said Ben Williams, FERC director of the office of external affairs. The agency expects it will vote on a PJM proposal within three months of one being filed at the commission, he noted.

The lack of near-term clarity on colocation is another negative development for IPPs and raises the potential that data center developers will prefer to work with regulated utilities instead of in competitive markets, Jeffries analysts said.

Issues surrounding siting data centers at large power plants in PJM came to a head late last year.

The agency in November rejected an amended interconnection service agreement that would have facilitated expanded power sales to a colocated Amazon data center from the Susquehanna nuclear power plant in Pennsylvania that is majority owned by Talen.

Also, FERC held a technical conference on colocated load, and Constellation Energy Generation filed a complaint over PJM’s colocation rules. The agency’s “show cause” order, issued Thursday, combines the records of the technical conference and the Constellation complaint.

FERC gave PJM and its transmission owners 30 days to explain whether the grid operator’s colocation rules are just and reasonable or what changes would make them just and reasonable. Other parties will then have 30 days to respond.

FERC asked PJM and its transmission owners to respond to a series of questions dealing with how colocation could affect transmission service, interconnection, cost allocation and PJM’s markets.

Separately, FERC rejected proposals by Exelon utilities regarding colocated load, saying the proposals exceeded their filing rights.

Here are six other takeaways from the meeting.

FERC to hold resource adequacy technical conference

The agency will hold a two-day technical conference starting June 4 to explore resource adequacy issues in regional transmission organization and independent system operator markets, Christie said.

The conference is driven by “astronomical” load forecasts and a failure to bring online enough generating capacity at an adequate pace, Christie said during a briefing with reporters. Further, there have been a flurry of recent complaints and reform proposals related to PJM’s capacity market, Christie said. PJM governors have become involved in the issue, he said, noting he had an extensive conversation with Pennsylvania Gov. Josh Shapiro, D, about PJM’s capacity market and consumer costs. “We’ve had a lot of controversy, a lot of complaints,” Christie said. “I want to get in front of it.”

In PJM, there’s “fermentation” about alternatives to the grid operator’s capacity market, according to Christie.

FERC approves PJM capacity market proposals

The agency on Thursday approved PJM’s proposal to extend its capacity must-offer requirement to intermittent resources, storage resources and hybrid resources and to update its market seller offer cap. In approving the proposal, FERC rejected concerns raised by PJM’s market monitor, trade groups for power plant owners and renewable energy companies and ratepayer advocates.

Citing the market monitor’s analysis, FERC said PJM’s must-offer exemption inflated revenues in the last base capacity auction by $4.1 billion. “Increasing the number of resources that participate in the capacity market will allow for more competition and, in turn, help ensure that the capacity market produces just and reasonable rates,” FERC said.

No cuts made to FERC’s probationary staff

Although the Trump administration is working to cut federal employees, in part by firing workers that are in probationary hiring periods, FERC has had zero probationary staff cuts, according to Christie. “No one has been terminated,” he said.

FERC has not been contacted by the Department of Government Efficiency, Christie said. DOGE is an advisory body in the Executive Office a temporary organization that aims to cut federal spending. Among the more than 200,000 federal workers who have lost their jobs in the last month, about 2,000 people at the Department of Energy have been fired, according to ABC News.

FERC’s funding comes from fees levied on the companies the agency regulates, not from taxpayers, Christie said. “We are deficit-neutral.”

FERC rejects LS Power project transmission incentives

Great Basin Transmission, an LS Power subsidiary, failed to show it was eligible for requested incentives for the Southwest Intertie Project–North transmission line connecting Nevada and Idaho as well as related upgrades to the One Nevada 500-kV transmission line, FERC said. The agency rejected Great Basin’s request that it be able to recover all its prudently incurred costs if the project is abandoned for reasons beyond its control and be able to defer recovery of prudent pre-commercial costs through the creation of a regulatory asset. 

“Great Basin has not shown that its project ensures reliability or reduces the cost of delivered power by reducing transmission congestion,” FERC said.

FERC rejects Invenergy complaint against Xcel utility

The agency dismissed a complaint from Invenergy subsidiaries Salsa Solar Energy and Towner Wind Energy III that argued that the Public Service Company of Colorado is improperly reserving transmission capacity on its Power Pathway transmission project for the utility’s own unqueued generating resources ahead of Invenergy’s queued generation projects, which total 500 MW.

“PSCo may set aside transmission capacity on the Power Pathway under its native load priority, through its calculation of [available transfer capability,] to accommodate the acquisition of additional generation resources to meet its native load obligation,” FERC said.

The agency also rejected Invenergy’s argument that PSCo’s delay in providing complete and transparent study assumptions highlighted anticompetitive and unduly discriminatory conduct.

NERC extreme weather standard approved

FERC approved TPL-008-1, a North American Electric Reliability Corp. reliability standard on transmission system planning for extreme heat and cold weather. The standard requires periodic extreme temperature assessments and requires corrective action response plans to fix any identified grid problems. It is set to be phased in over five years.

“Although system planning measures alone will not eliminate the reliability risk associated with extreme heat and extreme cold events, we find that Reliability Standard TPL-008-1 will help prepare the bulk-power system for extreme weather events in the long term and, together with the requirements in the Cold Weather Reliability Standards, will work to mitigate the near-term reliability impacts of extreme weather events,” FERC said.

Editor’s note: This story was updated to include a comment from FERC on the timing of expected action on its colocation review.

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FERC complies with major portions of Trump order on independent agencies: Christie

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FERC launches colocation review, plus 6 other open meeting takeaways

The Federal Energy Regulatory Commission on Thursday launched a review of issues related to colocating large loads, such as data centers, at power plants in the PJM Interconnection. “There are tremendous implications for reliability and consumers, and we have to be fair,” FERC Chairman Mark Christie said during the agency’s monthly meeting. At the same time, utilities have an obligation to serve new customers, he said. FERC’s effort to clarify rules for colocated load comes amid a surge in data center development across the United States, partly driven by the growth of artificial intelligence. Colocating data centers at existing power plants provides a potential pathway to bringing data centers online quickly and at lower cost compared with “front of meter” options. However, new rules governing colocated resources in PJM likely won’t be approved by FERC until early next year, creating a period of uncertainty for independent power producers such as Talen Energy and Vistra by delaying deal announcements with data center operators, Capstone analysts said Thursday. FERC aims to approve new colocation rules for PJM this year, said Ben Williams, FERC director of the office of external affairs. The agency expects it will vote on a PJM proposal within three months of one being filed at the commission, he noted. The lack of near-term clarity on colocation is another negative development for IPPs and raises the potential that data center developers will prefer to work with regulated utilities instead of in competitive markets, Jeffries analysts said. Issues surrounding siting data centers at large power plants in PJM came to a head late last year. The agency in November rejected an amended interconnection service agreement that would have facilitated expanded power sales to a colocated Amazon data center from the Susquehanna nuclear power plant in Pennsylvania that is majority owned by

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U.S. Department of Energy Recognizes National Black History Month, 2025

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Do data centers threaten the water supply?

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Ireland says there will be no computation without generation

Stanish said that, in 2023, she wrote a paper that predicted “by 2028, more than 70% of multinational enterprises will alter their data center strategies due to limited energy supplies and data center moratoriums, up from only about 5% in 2023. It has been interesting watching this trend evolve as expected, with Ireland being a major force in this conversation since the boycotts against data center growth started a few years ago.” Fair, equitable, and stable electricity allocation, she said, “means that the availability of electricity for digital services is not guaranteed in the future, and I expect these policies, data center moratoriums, and regional rejections will only continue and expand moving forward.” Stanish pointed out that this trend is not just occurring in Ireland. “Many studies show that, globally, enterprises’ digital technologies are consuming energy at a faster rate than overall growth in energy supply (though, to be clear, these studies mostly assume a static position on energy efficiency of current technologies, and don’t take into account potential for nuclear or hydrogen to assuage some of these supply issues).” If taken at face value, she said, this means that a lack of resources could cause widespread electricity shortages in data centers over the next several years. To mitigate this, Stanish said, “so far, data center moratoriums and related constraints (including reduced tax incentives) have been enacted in the US (specifically Virginia and Georgia), Denmark, Singapore, and other countries, in response to concerns about the excessive energy consumption of IT, particularly regarding compute-intense AI workloads and concerns regarding an IT energy monopoly in certain regions. As a result, governments (federal, state, county, etc.) are working to ensure that consumption does not outpace capacity.” Changes needed In its report, the CRU stated, “a safe and secure supply of energy is essential

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Perspective: Can We Solve the AI Data Center Power Crisis with Microgrids?

President Trump announced a$500 billion private sector investment in the nation’s Artificial Intelligence (AI) infrastructure last month. The investment will come from The Stargate Project, a joint venture between OpenAI, SoftBank, Oracle and MGX, which intends to build 20 new AI data centers in the U.S in the next four to five years. The Stargate Project committed$100 billion for immediate deployment and construction has already begun on its first data center in Texas. At approximately a half a million square feet each, the partners say these new facilities will cement America’s leadership in AI, create jobs and stimulate economic growth. Stargate is not the only game in town, either. Microsoft is expected to invest$80 billion in AI data center development in 2025, with Google, AWS and Meta also spending big. While all this investment in AI infrastructure is certainly exciting, experts say there’s one lingering question that’s yet to be answered and it’s a big one: How are we going to power all these AI data centers? This will be one of the many questions tackled duringMicrogrid Knowledge’s annual conference, which will be held in Texas April 15-17 at the Sheraton Dallas. “Powering Data Centers: Collaborative Microgrid Solutions for a Growing Market” will be one of the key sessions on April 16. Industry experts will gather to discuss how private entities, developers and utilities can work together to deploy microgrids and distributed energy technologies that address the data center industry’s power needs. The panel will share solutions, technologies and strategies that will favorably position data centers in the energy queue. In advance of this session, we sat down with two microgrid experts to learn more about the challenges facing the data center industry and how microgrids can address the sector’s growing energy needs. We spoke with Michael Stadler, co-founder and

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Data Center Tours: Iron Mountain VA-1, Manassas, Virginia

Iron Mountain Northern Virginia Overview Iron Mountain’s Northern Virginia data centers VA-1 through VA-7 are situated on a 142-acre highly secure campus in Prince William County, Virginia. Located at 11680 Hayden Road in Manassas, Iron Mountain VA-1 spans 167,958 sq. ft. and harbors 12.4 MW of total capacity to meet colocation needs. The 36 MW VA-2 facility stands nearby. The total campus features a mixture of single and multi-tenant facilities which together provide more than 2,000,000 SF of highly efficient green colocation space for enterprises, federal agencies, service providers and hyperscale clouds.  The company notes that its Manassas campus offers tax savings compared to Ashburn and exceptional levels of energy-efficiency as well as a diverse and accessible ecosystem of cloud, network and other service providers.  Iron Mountain’s Virginia campus has 9 total planned data centers, with 5 operational facilities to date and two more data centers coming soon. VA-2 recently became the first data center in the United States to achieve DCOS Maturity Level 3.    As we continued the tour, Kinra led the way toward the break room, an area where customers can grab coffee or catch up on work. Unlike the high-end aesthetic of some other colocation providers, Iron Mountain’s approach is more practical and focused on functionality. At the secure shipping and receiving area, Kinra explained the process for handling customer equipment. “This is where our customers ship their equipment into,” he said. “They submit a ticket, send their shipments in, and we’ll take it, put it aside for them, and let them know when it’s here. Sometimes they ask us to take it to their environment, which we’ll do for them via a smart hands ticket.” Power Infrastructure and Security Measures The VA-1 campus is supported by a single substation, providing the necessary power for its growing

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Land and Expand: DPO, Microsoft, JLL and BlackChamber, Prologis, Core Scientific, Overwatch Capital

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Data center spending to top $1 trillion by 2029 as AI transforms infrastructure

His projections account for recent advances in AI and data center efficiency, he says. For example, the open-source AI model from Chinese company DeepSeek seems to have shown that an LLM can produce very high-quality results at a very low cost with some clever architectural changes to how the models work. These improvements are likely to be quickly replicated by other AI companies. “A lot of these companies are trying to push out more efficient models,” says Fung. “There’s a lot of effort to reduce costs and to make it more efficient.” In addition, hyperscalers are designing and building their own chips, optimized for their AI workloads. Just the accelerator market alone is projected to reach $392 billion by 2029, Dell’Oro predicts. By that time, custom accelerators will outpace commercially available accelerators such as GPUs. The deployment of dedicated AI servers also has an impact on networking, power and cooling. As a result, spending on data center physical infrastructure (DCPI) will also increase, though at a more moderate pace, growing by 14% annually to $61 billion in 2029.  “DCPI deployments are a prerequisite to support AI workloads,” says Tam Dell’Oro, founder of Dell’Oro Group, in the report. The research firm raised its outlook in this area due to the fact that actual 2024 results exceeded its expectations, and demand is spreading from tier one to tier two cloud service providers. In addition, governments and tier one telecom operators are getting involved in data center expansion, making it a long-term trend.

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Microsoft will invest $80B in AI data centers in fiscal 2025

And Microsoft isn’t the only one that is ramping up its investments into AI-enabled data centers. Rival cloud service providers are all investing in either upgrading or opening new data centers to capture a larger chunk of business from developers and users of large language models (LLMs).  In a report published in October 2024, Bloomberg Intelligence estimated that demand for generative AI would push Microsoft, AWS, Google, Oracle, Meta, and Apple would between them devote $200 billion to capex in 2025, up from $110 billion in 2023. Microsoft is one of the biggest spenders, followed closely by Google and AWS, Bloomberg Intelligence said. Its estimate of Microsoft’s capital spending on AI, at $62.4 billion for calendar 2025, is lower than Smith’s claim that the company will invest $80 billion in the fiscal year to June 30, 2025. Both figures, though, are way higher than Microsoft’s 2020 capital expenditure of “just” $17.6 billion. The majority of the increased spending is tied to cloud services and the expansion of AI infrastructure needed to provide compute capacity for OpenAI workloads. Separately, last October Amazon CEO Andy Jassy said his company planned total capex spend of $75 billion in 2024 and even more in 2025, with much of it going to AWS, its cloud computing division.

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John Deere unveils more autonomous farm machines to address skill labor shortage

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2025 playbook for enterprise AI success, from agents to evals

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More 2025 is poised to be a pivotal year for enterprise AI. The past year has seen rapid innovation, and this year will see the same. This has made it more critical than ever to revisit your AI strategy to stay competitive and create value for your customers. From scaling AI agents to optimizing costs, here are the five critical areas enterprises should prioritize for their AI strategy this year. 1. Agents: the next generation of automation AI agents are no longer theoretical. In 2025, they’re indispensable tools for enterprises looking to streamline operations and enhance customer interactions. Unlike traditional software, agents powered by large language models (LLMs) can make nuanced decisions, navigate complex multi-step tasks, and integrate seamlessly with tools and APIs. At the start of 2024, agents were not ready for prime time, making frustrating mistakes like hallucinating URLs. They started getting better as frontier large language models themselves improved. “Let me put it this way,” said Sam Witteveen, cofounder of Red Dragon, a company that develops agents for companies, and that recently reviewed the 48 agents it built last year. “Interestingly, the ones that we built at the start of the year, a lot of those worked way better at the end of the year just because the models got better.” Witteveen shared this in the video podcast we filmed to discuss these five big trends in detail. Models are getting better and hallucinating less, and they’re also being trained to do agentic tasks. Another feature that the model providers are researching is a way to use the LLM as a judge, and as models get cheaper (something we’ll cover below), companies can use three or more models to

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OpenAI’s red teaming innovations define new essentials for security leaders in the AI era

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More OpenAI has taken a more aggressive approach to red teaming than its AI competitors, demonstrating its security teams’ advanced capabilities in two areas: multi-step reinforcement and external red teaming. OpenAI recently released two papers that set a new competitive standard for improving the quality, reliability and safety of AI models in these two techniques and more. The first paper, “OpenAI’s Approach to External Red Teaming for AI Models and Systems,” reports that specialized teams outside the company have proven effective in uncovering vulnerabilities that might otherwise have made it into a released model because in-house testing techniques may have missed them. In the second paper, “Diverse and Effective Red Teaming with Auto-Generated Rewards and Multi-Step Reinforcement Learning,” OpenAI introduces an automated framework that relies on iterative reinforcement learning to generate a broad spectrum of novel, wide-ranging attacks. Going all-in on red teaming pays practical, competitive dividends It’s encouraging to see competitive intensity in red teaming growing among AI companies. When Anthropic released its AI red team guidelines in June of last year, it joined AI providers including Google, Microsoft, Nvidia, OpenAI, and even the U.S.’s National Institute of Standards and Technology (NIST), which all had released red teaming frameworks. Investing heavily in red teaming yields tangible benefits for security leaders in any organization. OpenAI’s paper on external red teaming provides a detailed analysis of how the company strives to create specialized external teams that include cybersecurity and subject matter experts. The goal is to see if knowledgeable external teams can defeat models’ security perimeters and find gaps in their security, biases and controls that prompt-based testing couldn’t find. What makes OpenAI’s recent papers noteworthy is how well they define using human-in-the-middle

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