Large-Load Interconnection and NEPA Shifts: FERC’s June Commission Meeting

Originally published for customers June 24, 2026.

What’s the issue?

FERC’s June 18 meeting had two major developments: show cause orders addressing large-load interconnections and a new approach to cumulative impacts analysis under NEPA.

Why does it matter?

The show cause orders launch a national conversation on integrating large loads while balancing transparency, efficient process, ratepayer protection, and interconnection flexibility. The NEPA shift could influence pipeline and LNG permitting almost immediately.

What’s our view?

The large-load proceeding gets the ball rolling, but the process will still take months. The new cumulative impacts approach could be easier on staff, but durability depends on how future environmental documents are written and how courts respond to challenges.

FERC’s June 18, 2026 open meeting produced two significant actions with different time horizons. The first — show cause orders directed at six major grid operators — formally launches FERC’s large load interconnection proceeding, structured to address the growing wave of data centers and industrial facilities requesting more than 20 MW of capacity. The second eliminates the stand-alone cumulative impacts section from NEPA environmental reviews, a methodological shift that could reshape how pipeline and LNG terminal approvals are written and challenged in court. This post breaks down both actions, the legal context behind each, and what they mean for project development in the near term.

FERC’s NEPA Shift: No More Stand-Alone Cumulative Impacts Analysis

Although the large-load proceedings captured most of the spotlight, the NEPA change carries more immediate implications for natural gas pipelines and LNG terminals. The Commission is no longer treating cumulative impacts as a stand-alone analytical requirement under NEPA — but that does not necessarily mean the surrounding environmental context disappears from the analysis.

That distinction matters most when read alongside Healthy Gulf v. FERC. As Arbo detailed in a July 2024 Insight on LNG and intrastate pipeline litigation, Pipeline Progress and a Commonwealth of Litigation: LNG and Intrastate Snapshot, the D.C. Circuit remanded FERC’s approval of Commonwealth LNG after concluding the Commission had not adequately analyzed cumulative nitrogen dioxide (NO₂) impacts. FERC completed a supplemental environmental analysis to address the court’s remand.

A lot has changed since Healthy Gulf. Most notably, the Supreme Court’s Seven County decision significantly narrowed NEPA’s reach, giving agencies greater discretion to focus on the environmental effects of the proposed action rather than impacts beyond their authority. That provides strong support for FERC to narrow indirect effects analysis, including upstream production and downstream combustion. Whether it provides the same support for cumulative impacts is less clear.

The cumulative effects question in Healthy Gulf was not about consequences beyond FERC’s jurisdiction, but about whether FERC had adequately analyzed cumulative air emissions within the project’s environmental setting. As applied to future litigation, the challenges may change less than the terminology. Petitioners can still argue FERC’s NEPA analysis failed to adequately evaluate and explain how a project’s impacts fit within the surrounding environmental context. How much traction that argument gets will depend on the underlying FERC analysis and how courts view it in light of generally increased agency discretion after Seven County.

It is difficult to imagine FERC abandoning this type of analysis altogether. More likely, FERC will continue evaluating the surrounding environmental context to some degree — just not as a stand-alone section. If that happens, future disputes are more likely to focus on the adequacy of the analysis than on the absence of a particular heading. As in Healthy Gulf, remand appears more likely than vacatur. Given FERC’s speed in preparing environmental analysis, that may ultimately prove more procedural than project-threatening.

As Arbo’s Q2 Gas Infrastructure Litigation Update details, cumulative impacts arguments have surfaced in CP2, MVP Southgate, and Rio Grande LNG / Rio Bravo Pipeline litigation. While all predate the Commission’s newly announced approach, they remain instructive for assessing how much the analytical environment has shifted after Seven County.

Large-Load Interconnection: FERC’s Show Cause Orders to Six RTOs

Rather than opening a formal rulemaking with a nationwide proposal, FERC issued show cause orders to six major load balancing authorities: CAISO, ISO-NE, MISO, NYISO, PJM, and SPP. That approach has two advantages. Instead of wading through the notice-and-comment process, show cause orders require each load balancing authority to either defend its current framework or propose something better. It also recognizes that regional market structures vary significantly, making a single standardized national solution difficult.

For context, the Secretary of Energy directed FERC to initiate a rulemaking on large-load interconnection on October 23, 2025. On October 27, 2025, FERC responded with an Advance Notice of Proposed Rulemaking (ANOPR). In that ANOPR, FERC defined large loads as those requiring more than 20 megawatts (MW) of capacity — consistent with its definition of large generators under Order 2003. Commenters have proposed higher thresholds and alternative approaches for determining what qualifies as a large load.

Because the reforms requested by FERC would cover new loads and “hybrid facilities” — loads that share a point of interconnection with new or existing generation facilities — Arbo examined power plants whose primary business is supplying power to end users rather than the grid, using Form EIA-860 data (Annual Electric Generator Report). While these plants are not demand loads themselves, they serve as an indirect baseline for one type of existing co-located demand load. The chart below shows generation capacities of power plants associated with loads in industries expected to experience high growth. For a parallel look at how geography and load growth interact with permitting risk at the project level, see Arbo’s analysis of Data Center Geography, Power Grids, and Permitting Risk.

Note that this reflects only operating power plants. Because the Form EIA-860 data includes planned generators with known commercial operation dates up to 10 years from the reporting period, it does not capture projected power demand.

Mechanically, the RTOs and ISOs have 60 days from the June 18 order — putting responses due approximately August 17, 2026 — and can request 90-day extensions within 45 days. That aggressive timeline matched the tone of the initiative. Should the grid operators fail to respond adequately, the Commissioners were clear that they would take back the wheel.

Against that timeline, the five issues named by the Commission are substantial. FERC is effectively asking grid operators to develop an efficient, transparent process for studying and expeditiously authorizing flexible, proximate, co-located, and behind-the-meter large loads, while preventing unjust cost shifts to existing customers — with alternative transmission technology deployment as a further objective. Due in 60 days. FERC was also careful to stay in its jurisdictional lane throughout, clearly preserving state authority to regulate retail sales and siting and construction.

Frequently Asked Questions

What are FERC’s large-load interconnection show cause orders?
Show cause orders require each of six grid operators — CAISO, ISO-NE, MISO, NYISO, PJM, and SPP — to either defend their existing interconnection frameworks for large loads or propose improvements. Operators have 60 days to respond, with a 90-day extension available if requested within 45 days.

How does FERC define a large load for interconnection purposes?
In its October 2025 ANOPR, FERC defined large loads as facilities requiring more than 20 MW of capacity, consistent with its definition of large generators under Order 2003. Commenters have proposed higher thresholds since the ANOPR issued.

What changed in FERC’s NEPA cumulative impacts analysis?
FERC will no longer produce a stand-alone cumulative impacts section in its NEPA environmental review documents. The surrounding environmental context is expected to remain in the analysis — just not as a separate heading — shifting future litigation from whether the section exists to whether the underlying analysis is adequate.

How does the Supreme Court’s Seven County decision affect FERC’s NEPA approach?
Seven County significantly narrowed NEPA’s reach, giving agencies greater discretion to focus analysis on the direct effects of proposed actions. That gives FERC strong support for narrowing indirect effects review, including upstream production and downstream combustion. Its application to cumulative impacts specifically is less settled.

If you would like to discuss FERC’s large-load interconnection proceeding, the NEPA cumulative impacts shift, or their implications for natural gas infrastructure development, please contact us.