Daily Energy Insider
FERC Commissioners Defend Large-Load Interconnection Orders, Back Hydropower Licensing Streamlining Before Senate Energy Panel
U.S. Senate Committee on Energy and Natural Resources | Oversight Hearing — July 22, 2026
AI Assisted Summary | July 22, 2026
All five members of the Federal Energy Regulatory Commission appeared before the Senate Committee on Energy and Natural Resources on July 22 for an oversight hearing dominated by the commission’s June show cause orders directing the nation’s six regional grid operators to reform how large loads such as data centers connect to the transmission system. Senators from both parties pressed the commissioners on protecting ratepayers from data center-driven costs, deploying advanced transmission technologies, and managing a coming wave of hydropower relicensing, while several Democrats warned that federal permitting must treat all energy resources evenhandedly.
Testifying were Chairman Laura Swett and Commissioners David Rosner, Lindsay See, Judy Chang, and David LaCerte. Sen. Angus King (I-Maine) told the panel their unanimous voting record was a model of nonpartisan regulation, saying anyone watching the hearing would struggle to identify which commissioner was nominated by which party.
Large Loads and Data Center Costs
Chairman Sen. Mike Lee (R-Utah) opened by crediting the commission’s action under Section 206 of the Federal Power Act directing six regional transmission organizations and independent system operators to re-examine large-load interconnection rather than imposing a one-size-fits-all federal mandate. Swett said the June orders put the markets on a “shot clock” to modernize transmission service and study timelines, require consideration of advanced transmission technologies and of load sited near generation, and force each market to report on how it will address generation adequacy — an area outside FERC’s direct jurisdiction.
Rosner said the pending orders rest on four pillars — protecting consumers, enhancing transparency, safeguarding reliability, and fostering innovation — and described contract requirements to prevent stranded costs if a large load leaves early or a project is never energized. He said the orders also require utilities that build network upgrades to serve a large load to make that spending public so state commissions can assign it to the right customer under their own large-load tariffs, noting that more than 30 states have such rate structures in place or under development.
Responding to Sen. Cindy Hyde-Smith (R-Miss.), Swett said the commission is pairing the market-wide orders with case-by-case review of the utility-hyperscaler interconnection agreements filed almost daily, examining them to ensure upgrade costs required by large loads are not shifted to consumers. Under questioning from Sen. Tom Cotton (R-Ark.), LaCerte cited FERC’s longstanding beneficiary-pays principle and pointed to the ratepayer protection pledge agreed to by PJM-state governors and major hyperscalers. Swett and Rosner both said hyperscalers appearing before the commission have expressed willingness to pay their full interconnection costs, with some offering community infrastructure programs or bill subsidies beyond that.
Chang told Sen. Mazie Hirono (D-Hawaii) that the orders’ cost-shifting and transparency provisions position the commission to allocate network upgrade costs triggered by data centers to the loads that cause them.
PJM Governance Conference
Swett told Sen. Dave McCormick (R-Pa.) that PJM Interconnection, which serves 67 million Americans, is the country’s largest and oldest market and, in her view, “probably performing the worst.” She said a July 23 technical conference on PJM governance and stakeholder processes is designed to build a record of problems and solutions from panelists spanning federal and state officials, utilities, transmission owners, hyperscalers, and other market participants, with the goal of a PJM that can propose well-supported reforms quickly.
McCormick, noting Pennsylvania’s status as the nation’s third-largest electricity producer, asked how FERC would prevent any single state from distorting the regional market. Rosner said future PJM proposals will be reviewed for consistency with cost-causation principles and fair treatment of all customers, while cautioning that the market saves consumers billions annually and that reforms will not work without state buy-in.
Advanced Transmission Technologies
Sen. Martin Heinrich (D-N.M.), the committee’s ranking member, and King pressed the commissioners on incentives for grid-enhancing technologies, with King displaying a conventional conductor alongside a carbon-fiber replacement he said carries twice the power without new poles or right-of-way. King warned that transmission’s share of electric bills has grown from about 30 percent to 40 to 50 percent and that cost-of-capital ratemaking rewards overbuilding rather than efficiency.
Swett said she has convened an internal task force on grid-enhancing technologies, including potential incentive structures grounded in demonstrated ratepayer savings, but noted her view that the Federal Power Act bars FERC from mandating construction of particular transmission facilities outside its backstop siting authority. See said the June orders require utilities to take a hard look at the technologies in transmission studies and invited Congress to grant clearer authority. Rosner said the orders go further than any prior commission action by requiring power-flow studies capable of modeling the technologies and public reports when utilities decline to use them. Chang said FERC could ask transmission developers seeking rate incentives to explain what technologies they considered and why better options were not adopted.
Interconnection Queues and Automation
Heinrich cited Lawrence Berkeley National Laboratory data showing more than 8,200 proposed power plants seeking grid connection at the end of 2025, while only 13 percent of capacity that entered queues between 2000 and 2020 reached commercial operation. He pointed to his newly introduced Grid Connection and Congestion Management Act, modeled on ERCOT’s connect-and-manage process, as part of a broader Grid for Growth initiative.
Rosner said automation offers a major opportunity beyond Order No. 2023, citing the Midcontinent Independent System Operator, where processing the 2021 study cluster of more than 100 gigawatts took 686 days by hand but less than 10 days using automated tools. Chang highlighted the commission’s approval of Southwest Power Pool’s consolidated planning process, which gives interconnecting generators earlier cost certainty, as a model other regions could follow.
Hydropower Licensing
All five commissioners answered yes when Sen. Steve Daines (R-Mont.) asked whether the hydropower licensing and relicensing process should be streamlined, with roughly 40 percent of the non-federal fleet due for relicensing — by 2035, in figures cited by Sen. Catherine Cortez Masto (D-Nev.), who noted her Hydropower Licensing Transparency Act (S. 3500) with Daines would require annual FERC reports to Congress on pending projects.
See said the commission is evaluating whether a blanket-authorization program modeled on decades of natural gas experience could cover routine hydropower projects and amendments, with public comment to follow before any next steps, though she declined to give a timeline. Daines said he has introduced the Hydropower Licensing Affordability Act with Sens. Jim Risch (R-Idaho) and Lisa Murkowski (R-Alaska) to require that mandatory license conditions imposed by resource agencies relate directly to a project, and that he has asked FERC and three departments to open a rulemaking on Sections 4(e) and 18 of the Federal Power Act. Swett said she personally pushes back on indirect or costly mandatory conditions, including on Montana relicensings such as Thompson Falls Dam, and that FERC is processing — but has not yet granted — construction-deadline extension requests under the recently enacted S. 1020, which she said is a matter of timing.
Seminoe Pumped Storage
Sen. John Barrasso (R-Wyo.) raised FERC staff’s June 12 final environmental impact statement for the Seminoe Pumped Storage Project in central Wyoming, saying constituents fear harm to the state’s only disease-free bighorn sheep herd, to mule deer, pronghorn, and sage-grouse habitat, and to the Miracle Mile trout fishery on the North Platte River. He entered Wyoming’s comments into the hearing record, and Swett and Chang each committed to considering the state’s comments in the final licensing decision.
Barrasso also asked how states like Wyoming — the largest electricity exporter in the Western Interconnection — will have a voice as Western markets evolve. Swett said FERC has ordered Southwest Power Pool and the California Independent System Operator to report jointly on seams issues, a step LaCerte said Western states welcomed, and See said state voice in market governance is central to ensuring just and reasonable rates.
Hawaii LNG Review
Hirono asked about Longboard TerminalCo, LLC, a JERA Americas subsidiary that began FERC pre-filing in May for an offshore liquefied natural gas import terminal and pipeline in Hawaii — the state’s first significant engagement with FERC — noting the parent company has also signaled interest in becoming a regulated generation utility in the state. Swett committed to a rigorous economic public-need analysis that would encompass the factors Hirono raised, including whether Hawaii should have two utilities providing energy.
Swett said that after the Supreme Court’s Seven County decision the commission no longer reviews downstream impacts but still examines a project’s direct environmental impacts on the local community, and she offered FERC staff briefings for Hirono’s office. She added that FERC’s statutorily required Office of Public Participation helps engage communities and that, in her experience, projects that work with communities have greater success.
Enforcement
Cortez Masto commended the commission’s April enforcement order against American Efficient, which FERC described as one of the largest and most brazen fraud schemes in its history, and noted her reintroduced Energy Consumer Protection Act with Sen. Maria Cantwell (D-Wash.) would let FERC ban or limit repeat market manipulators. Swett, a former FERC enforcement prosecutor, said she was proud to issue the largest penalty in commission history — the $722 million assessed against American Efficient — and is reviewing the enforcement program with an eye toward additional litigation training and high standards of rigor.
Permitting Reform
Asked by Lee about implementing Seven County, See said the ruling confirmed that NEPA requires review of the project before the agency, not non-foreseeable upstream or downstream effects, and that FERC has been stripping out analytical categories the statute does not require. She said further congressional clarity in NEPA and other environmental statutes is the single biggest lever for predictable, streamlined reviews, and separately told Sen. John Hoeven (R-N.D.) that FERC’s duty to be resource-neutral is not the same as being “reliability neutral” — a distinction she asked Congress to clarify.
In response to Hoeven’s request for each commissioner’s top recommendations, Swett called for ending states’ ability to effectively veto interstate projects through Clean Water Act denials and for a statutory limit on the duration of judicial review. LaCerte listed clarifying that Clean Water Act Section 401 covers only pollutants from the discharge itself, codifying the National Historic Preservation Act Section 106 as a procedural statute, limiting hydropower conditions under Federal Power Act Sections 4(e) and 18 to direct effects, and reforming Endangered Species Act Section 7 critical-habitat designations consistent with the Maine Lobstermen’s holding. Rosner said it simply takes too long to build infrastructure of every kind, citing a proposed Ohio combined-cycle plant of more than 1,000 megawatts that drew a grid upgrade cost above $1 billion, and Chang urged focus on backbone transmission, demand-side resources, and advanced transmission technologies.
King cautioned that he supports permitting reform only if it is evenhanded, saying the administration has its “thumb on the scale” against renewables, with roughly 100 wind and solar projects awaiting action at the Interior Department and about 185 wind projects stopped at the military siting clearinghouse without explanation. In his opening statement, Heinrich said a report he released found the administration is slow-walking 73 gigawatts of solar, 43 gigawatts of storage, 30 gigawatts of onshore wind, and 16 gigawatts of offshore wind, which he said would raise economy-wide utility costs by approximately $11.6 billion per year, and he warned that FERC’s independence must be preserved for its consumer-protection mission to succeed.
Staffing
Swett told Sen. Ruben Gallego (D-Ariz.) that FERC currently has 1,370 full-time employees and has hired 74 mostly subject-matter experts since the Office of Personnel Management reopened hiring for the agency in January, with rolling job postings continuing. Cortez Masto said she would submit questions for the record on staff attrition and how Congress can help address it.
To view the full hearing, click here.