The Federal Energy Regulatory Commission (FERC) and PJM Interconnection LLC, a regional transmission organization regulated by the FERC, are facing a host of issues related to rising energy demand driven by the interconnection of new data centers to the power grid. Wilson Sonsini attorney and former FERC general counsel Matt Christiansen was quoted in Bloomberg Law's recent article "PJM Tackling Data Center Demand Requires Federal, State Juggling," analyzing the jurisdictional challenges posed by these proceedings involving FERC and PJM.

“Where things start to get hairy is in order for a new data center to come online, it has to interconnect to the transmission system under FERC’s jurisdiction, often pay for upgrades—but the actual terms of the sale are under state power to that data center,” said Matt. He pointed to U.S. Supreme Court cases (Oneok Inc. v. Learjet Inc., Hughes v. Talen Energy Mktg. LLC, and FERC v. Elec. Power Supply Ass’n) that define how FERC and PJM operate. "What those cases collectively stand for is that FERC cannot regulate matters within state jurisdiction or take actions within its jurisdiction that aim at or target matters within state jurisdiction," Matt said. PJM had considered giving directives to cut power based on the nature of the retail customer, like limiting electricity to data centers, but has since significantly revised its proposal and “seems to be taking on a facilitating role, which is much more consistent with the Federal Power Act’s division of jurisdiction," said Matt.

Click here to read the full article on Bloomberg Law.