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In April, I wrote about how FERC's interconnection rulemaking was finally unclogging the generation-side bottleneck that had stalled thousands of megawatts of new capacity. The thesis was straightforward: regulatory mechanics dictate market winners. Weeks later, the battlefield has shifted — and the stakes are arguably higher. The Maryland Office of People's Counsel has filed a Federal Power Act Section 206 complaint at FERC arguing that PJM's transmission cost allocation rules are forcing residential and commercial ratepayers to subsidize billions in grid upgrades driven by hyperscaler data center load.[1] Meanwhile, Meta and EDP Renewables quietly closed a 250-MW solar PPA, their third deal totaling 545 MW.[2] The juxtaposition is telling: corporate procurement is accelerating at exactly the moment regulators are questioning who actually pays for the grid infrastructure those facilities require.
The Bottleneck Has Moved
For the better part of three years, the dominant narrative in energy development was interconnection queue congestion. Thousands of projects sat in limbo, waiting for grid operators to process studies and assign upgrade costs. FERC's recent rulemaking addressed much of that dysfunction on the supply side — creating clearer milestones, financial readiness requirements, and faster processing timelines for generation seeking to connect.
But getting generation onto the grid was only half the equation. The harder question — the one now landing on FERC's desk — is who pays for the transmission capacity required to deliver power to the massive, concentrated loads that data centers represent. In PJM, the answer has historically been socialization. Under Schedule 12, baseline Regional Transmission Expansion Plan (RTEP) upgrades are allocated across broad ratepayer zones, regardless of which specific loads triggered the need. That framework was designed for an era of gradual, distributed load growth. It was never built to handle Data Center Alley.
PJM is managing billions in required baseline transmission upgrades, largely triggered by explosive load growth concentrated in Loudoun County, Virginia, and surrounding states — costs that under current rules are spread across ratepayers who derive no direct benefit from hyperscaler facilities.[1]
The Maryland OPC's complaint is a direct challenge to that status quo. It argues that socializing these costs is unjust and unreasonable under Section 206, and it asks FERC to revisit how PJM assigns transmission upgrade obligations when identifiable, hyper-concentrated loads are the primary cost driver.
Oregon Draws the Blueprint
PJM isn't the only jurisdiction grappling with this. The Oregon Public Utility Commission recently approved a dedicated data center rate class for Portland General Electric, creating a structural separation between hyperscaler demand and the general rate base.[3] The mechanics matter: by ring-fencing data center load into its own class, Oregon ensures that capacity charges, transmission riders, and demand-related infrastructure costs are borne by the customers creating them — not averaged across residential and small commercial accounts.
This is a meaningful precedent. If other state PUCs follow Oregon's lead, the economic assumptions underpinning hyperscaler site selection and procurement strategies will need to be fundamentally revisited. A data center developer choosing between jurisdictions will no longer just evaluate land cost, fiber connectivity, and power availability — they will need to model the full, ring-fenced cost of grid service, including localized transmission buildout.
The PPA Model Under Pressure
Against this backdrop, the Meta-EDPR 250-MW solar PPA illustrates a growing disconnect.[2] Virtual power purchase agreements have been the workhorse of corporate renewable procurement — a hyperscaler contracts for solar or wind at a remote node, claims the renewable energy certificates, and satisfies its sustainability targets on paper. The actual facility runs on whatever the local grid delivers, 24 hours a day, 7 days a week.
That model works when the grid costs associated with serving data center load are invisible — socialized across millions of ratepayers and buried in regional tariffs. It works less well when regulators begin demanding cost causation accountability. If FERC acts on the Maryland OPC complaint, or if PJM voluntarily reforms Schedule 12 to assign transmission upgrade costs more granularly, the all-in cost of serving a 100-MW data center campus will look dramatically different than what current PPA economics assume.
Developers like EDP Renewables face a new risk calculus: if transmission upgrade costs shift directly onto concentrated load centers or the generation serving them, future PPA strike prices will need aggressive restructuring to reflect the true delivered cost of power.
Sophisticated counterparties are likely already exploring change-in-law provisions in new VPPAs — clauses that reallocate risk if an RTO reforms its cost allocation methodology mid-contract. The question is whether those provisions are robust enough to handle the scale of potential reallocation, or whether they simply become the next round of commercial disputes.
What to Watch
Three developments will determine how fast this reckoning arrives. First, FERC's response to the Maryland OPC Section 206 complaint — whether the Commission institutes a formal proceeding or dismisses the complaint will signal how seriously it takes load-driven cost allocation reform. Second, whether other state consumer advocates in PJM states (particularly Virginia and New Jersey) file supporting interventions, which would broaden the political pressure on both FERC and PJM. Third, the pace at which other state PUCs replicate Oregon's dedicated rate class model — every state that ring-fences data center load narrows the geography where hyperscalers can socialize their grid costs.
The interconnection queue reforms addressed how generation gets built. The cost allocation fights now emerging will determine who pays for the grid that connects it to the loads driving unprecedented demand. For corporate offtakers, project developers, and the utilities caught between them, this is the regulatory docket that reshapes deal economics for the next decade.
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