The Federal Energy Regulatory Commission (FERC) has urged utilities and regulators to refine load forecasting practices as a means to keep pace with surging energy demand from the data center sector.

In a letter published this week, FERC chair David Rosner highlighted the scale of the challenge, noting that “regions across the country see significant electricity demand growth to power industries of the future, from the artificial intelligence revolution to the re-shoring of advanced manufacturing.”

He went on to describe it as both “an extraordinary economic opportunity” and a test of the power system’s ability to adapt.

Rosner warned that even minor forecasting errors can have significant consequences. “At a time when utilities forecast hundreds or thousands of megawatts of growth, improving forecasts by even a few percentage points in the right direction - up or down - can impact billions of dollars in investments and customer bills,” he said.

Rosner singled out data centers in particular as a crucial driver of load interconnection requests. He argued that, unlike other connections, data centers have unique characteristics that demand an updated approach. “Our experience to date tells us that large loads, such as data centers, have characteristics that call for new and improved forecasting methods,” he contended.

Rosner’s letter went on to pose several questions to key industry players, including how utilities verify whether large load projects will reach commercial operation, what objective criteria are applied before including them in forecasts, and how actual consumption compares to requested interconnection capacity. Rosner also urged utilities to coordinate at regional and interregional levels to prevent double-counting large loads.

“I’m optimistic that utilities have an opportunity to apply similar criteria to those currently used to assess the commercial readiness of large projects in the generator interconnection queue,” Rosner added.

The latter comes as utilities across the US struggle with enormous interconnection demands from data center companies. For example, in July, US utility American Electric Power (AEP) reported a pipeline of 18GW of incremental data center load growth through 2029.

Dominion Energy, which serves the Virginia market, reported in its Q4 2024 earnings that it had approximately 40GW in various stages of contracting as of December 2024. This compares to 21GW in July 2024, an 88 percent increase.