California’s independent system operator, CAISO (California Independent System Operator), has proposed new rules for connecting large loads, such as data centers, to the state's grid.

Earlier this week, the ISO said that its board approved a new proposal that seeks to enable large loads to interconnect faster to the transmission system.

The transmission operator will now file the proposal with the Federal Energy Regulatory Commission (FERC) by its November 16 deadline. The proposal responds to a June FERC order requiring the six regional grid operators to defend or change proposed large load tariffs, which FERC contended may be unjust and unreasonable.

“Our response to the FERC order to show cause will improve planning and operational awareness of new large loads on the system, prevent cost-shifting, encourage flexibility and expedite large load energization,” said Elliot Mainzer, CAISO’s president and CEO.

The package includes five main proposals. These include defining large loads as end users with a peak capacity of 50MW or more and maintaining load studies, which would allow the ISO to remotely disconnect large loads when needed for reliability. It also includes cost-protection measures that would require transmission owners to set tariff terms to prevent cost shifting.

It would also set new rules for colocated generation, exempting on-site loads that serve only a facility from an ISO study, but requiring any generation that injects into the grid to complete a study. In addition, colocated loads must be metered independently of offsetting generation, so they pay ancillary service charges. The rules would also permit large loads to connect early and receive service up to a level set by grid conditions until upgrades finish, then move to firm service, with each arrangement bespoke to the offtaker. Finally, it would seek to formulate a permanent flexible interconnection option and arrangements for electrically proximate generation, which would be developed sometime in 2027.

“We look forward to our ongoing collaboration with our participating transmission owners, state energy agencies and industry stakeholders to make sure we stay ahead of the curve on interconnecting large loads without compromising reliability or placing an undue burden on consumers,” Mainzer added.

CAISO is the first of the US’ transmission operators to see its proposal gain board approval. The firm is a non-profit public benefit corporation that manages the flow of high-voltage electricity across nearly 26,000 circuit miles (41,842km) of transmission lines, serving more than 30 million people across 80 percent of California and parts of Nevada. Data centers connected to CAISO’s transmission network have a combined capacity of approximately 8GW, including hotspots like Silicon Valley.