Plain-English framing: 'co-location' means putting a data center directly next to a power plant and having the plant feed the data center directly (rather than going through the grid). 'Behind the meter' means the generation is on the data center customer's side of the utility meter — so the customer pays for the generator's output directly, not via a transmission tariff. These are the two main ways a hyperscaler can avoid paying full grid transmission costs for very large new load. PJM's first compliance filing tried to define 'Co-Located Load' more narrowly than FERC wanted (which would have allowed more configurations to escape the new tariff rules), and tried to change the behind-the-meter generation application process. FERC rejected both moves in April and gave PJM 30 days to refile, which produced yesterday's filing. The accepted parts of the February filing — interconnection service below nameplate capacity, study based on requested service level — are operationally significant because they let a hyperscaler interconnect a 1 GW gas plant but only request 200 MW of grid-export service, which dramatically reduces upgrade costs allocated to the project. The rejected parts are still pending. The full colocation framework will not be settled until FERC rules on yesterday's filing, which historically takes 60-180 days. Best estimate for a FERC ruling: late July to mid-November 2026. Until then, any PJM co-location deal is being structured under provisional legal certainty. Sources: National Law Review 'FERC Issues Order on PJM Compliance Filings'; Troutman Pepper Locke Energy Report 'FERC Orders Further Compliance Filing in PJM Co-Location Proceedings'; Akin Gump 'FERC Clears the Way for Co-Location'; Day Pitney 'Federal Energy Regulatory Commission Orders Major PJM Tariff Reforms for Co-Located Load and Behind-the-Meter Generation'; FERC Fact Sheet on December 2025 PJM co-location order.
Primary source · FERC / National Law Review / Troutman Energy Report / Akin Gump / Day Pitney ↗
Why it matters
Two updates. (1) The hyperscaler 'build your own power plant and put the data center next to it' strategy is the single biggest economic alternative to waiting in PJM's transmission queue, and it remains in regulatory limbo. The accepted parts of the February filing are favorable enough that some configurations (large plant + smaller grid-export service request) are workable today, but the rejected parts mean the definition of 'co-located' itself is still contested. Any PJM-zone build-vs-buy-power analysis for data center customers needs an 'FERC ruling pending' caveat in the cost model. The cost difference between buying transmission service at full PJM rates vs. avoiding it via co-location is on the order of $40-80/MWh delivered (a real number — PJM transmission service for new large loads runs $30-60/MWh on transmission alone, plus capacity at $333/MW-day for 2026/2027 ≈ $24/MWh on a 60% load factor). For a 500 MW data center, that's $175M-$350M per year of tariff cost exposure. (2) For Cliff's regulatory tracking, the FERC co-location proceeding (EL25-49 et al.) is the single highest-stakes federal docket in the data center space and the most likely to produce material site-readiness changes for any PJM customer in 2026-2027. Add the FERC docket to the live-docket-intelligence wedge — this is exactly the kind of multi-stage federal proceeding that the regulatory knowledge graph is designed to track in real time, with each filing, comment, and order generating a structured event that affects downstream site economics. The next inflection points: (a) protest/comment deadline on PJM's May 18 filing (typically 21 days after filing, so ~June 8); (b) FERC ruling on the new compliance (60-180 days); (c) any rehearing requests after FERC rules.
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