CAISO Proposes 50 MW Threshold for Large Grid Connections

The California Independent System Operator (CAISO) will file its large-load interconnection proposal with FERC by November 16, after its board approved a package defining 50 MW as the threshold for California grid connections. The operator said earlier this week that its board had approved the proposal. It seeks faster transmission connections for large loads, including data centers.

Why is FERC reviewing the proposal?

The filing responds to a June FERC order requiring the six regional grid operators to defend or change proposed large-load tariffs. FERC contended that those tariffs might be unjust and unreasonable.

Elliot Mainzer, CAISO’s president and CEO, said: “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.” The package combines five main proposals.

What are the five main changes?

• Define a 50 MW threshold. End users with peak capacity of 50 MW or more would fall into the large-load category. CAISO would maintain load studies, allowing it to disconnect those users remotely when reliability requires it.
• Prevent cost shifting. Transmission owners would set tariff terms designed to keep a large load’s costs from shifting elsewhere. The package would make those terms part of the large-load connection framework.
• Regulate colocated generation and metering. On-site generation serving only its host facility would qualify for an exemption from an ISO study. Any generator injecting into the grid would still have to complete one, while colocated loads would need independent metering and would pay ancillary service charges.
• Permit early connection. Large loads could connect before upgrades finish and receive service up to a level set by grid conditions. Each offtaker would receive a bespoke arrangement before moving to firm service after upgrades.
• Create a flexible option. CAISO would formulate a permanent flexible interconnection option and arrangements for electrically proximate generation. Development would occur sometime in 2027.

What changes for developers?

The package gives qualifying projects an early operating path capped by grid conditions, followed by firm service after upgrades. It also makes reliability study participation and, for colocated loads, ancillary-service charges explicit conditions of supply.

Under the proposal, developers with on-site generation could avoid a study only when that output serves the facility alone. Grid-injecting generation would still require a study, and independent metering would prevent on-site output from offsetting the load’s ancillary-service charges.

Mainzer added: “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.” That collaboration will shape the detailed terms.

How significant is CAISO’s footprint?

CAISO is the first U.S. transmission operator whose proposal has gained board approval. The nonprofit public benefit corporation manages high-voltage power flow across nearly 26,000 circuit miles, or 41,842 km.

It serves more than 30 million people across 80 percent of California and parts of Nevada. Data centers connected to the network have approximately 8 GW of combined capacity, including hotspots such as Silicon Valley.

For data-center developers in that footprint, the proposal would create defined rules for connection timing, cost allocation, metering and staged service. Whether it accelerates projects will depend on FERC’s review, grid conditions that cap early service and the completion of network upgrades.