A year ago, Energy Secretary Chris Wright directed the Federal Energy Regulatory Commission to standardize large load interconnection, including expediting loads that agree to be curtailable. Then in June, FERC ordered all six regional transmission operators to revise or justify their existing large load tariffs.
Now, regulators are grappling with how to codify flexible tariffs, and the broader industry is grappling with how flexible interconnection will work in practice. At GridFwd 2026 last week, I sat down with experts from different parts of the energy world to get their take on the current state of flexible interconnection at the transmission level.
While there was broad agreement between RTOs, utilities, and software providers at the conference that flexibility can help manage large load growth, they agreed there isn’t a one-size-fits-all approach to determining how and when it can provide the most value.
For example, Arizona Public Service, an investor-owned utility serving just under 1.5 million customers in the Phoenix metro area, sees flexible interconnection as a reliability backstop, rather than a frontline tool for accelerating grid access.
At its core a flexible interconnection agreement involves reallocating risk between utilities, large load customers, and existing ratepayers, said Chris Lynn, the utility’s head of data centers. Under a traditional firm agreement, a utility may be forced to buy expensive capacity on the spot market during peak demand hours, and pass those costs onto regular ratepayers. A flexible interconnection setup, however, passes that risk to the large load that agrees to accept curtailment or run its own backup power during those critical peak windows.
Meanwhile, rising inflation and equipment costs mean power bills across the country are going up regardless of load growth, Lynn added, but this reallocation of risk may mean that overall customer bills grow more slowly than they otherwise would have.
But the trade off of a faster interconnection in exchange for flexibility isn’t one that APS has seen large loads chomping at the bit to make, at least to date.
“Flexible interconnection is definitely a tool, but it’s not the first thing [large loads] are asking for,” Lynn explained, adding that it’s just one in a suite of options they’re considering. “We don’t think it’s good for the APS brand to have service that’s extremely interruptible. It seems like a long-term key accounts nightmare.”
APS has so far put about 400 MW of flexible agreements in place, Lynn said. But the utility and its customers tend to view flexible interconnection as a “last step to make sure that we can preserve reliability” while waiting for longer-term generation and transmission to get built out.
He added that there’s a disconnect between developer enthusiasm for flexibility, versus what data center customers actually prioritize.
“Being treated like a second class citizen just doesn’t sell very well with the largest customers,” Lynn said. “We get to the table with the developer, and they’re like ‘I swear, the [data center customer] is going to be fine with a flexible interconnection and having some level of curtailment,’ And then you get one of those Big Five in the room on the other side of the table, and they try to negotiate that exact thing out at the very end.”
Implementation challenges
That said, there are certain regions where large loads are finding that flexible interconnection is their best option.
Carrie Simpson, vice president of markets at Southwest Power Pool, who spoke with me alongside Lynn at GridFwd, said the RTO has already received applications for its FERC-approved flexible interconnection pathway, which is just one part of its broader framework for connecting large loads to the grid.
SPP’s approach leverages flexible interconnection as a stopgap measure, allowing conditional service for up to seven years while transmission infrastructure needed to provide firm service gets built. But SPP is also developing a longer-term option, Simpson added, due to customer demand. That pathway, not yet approved by FERC, would allow indefinite non-firm, price-responsive service, with loads curtailing at specific price thresholds.
SPP has received 32 large load interconnection requests via its new pathway, totaling about 15 GW, Simpson said. She confirmed that there are large load applicants pursuing the conditional pathway, but said the RTO didn’t yet have a number to share publicly.
But tariffs alone won’t make flexible interconnection work at scale, both Lynn and Simpson agreed. Grid operators need visibility into what large loads can do, and into the specific terms of each agreement. They also need the technology to act on those agreements in real time when reliability is at stake, Simpson said. That’s an operational challenge as much as a policy one.
“There can be unintended consequences if we don’t get the requirements right and the visibility requirements given to those who are operating the grid,” Simpson explained, emphasizing that grid operators need clear real-time situational awareness of how these massive loads behave, which currently they don’t have.
Lynn pointed out that control room software simply wasn’t built to manage dynamic, multi-million-dollar curtailment stacks across dozens of dedicated customer substations. “Getting that information in front of the operator who is going to actually do the work has been a pretty big change management effort for us,” he said. “The tools just don’t do it today.”
Historically, operators only needed special load visibility into critical facilities like hospitals or emergency call centers. Today, control room staff manage dedicated data center substations often without software tools indicating which customer contract requires tripping next, under what trigger, or in what sequence.
“The operators looking at the grid don’t actually know the name of the customer on the other side of that substation,” Lynn explained. “Which contractual requirement requires them to trip which customer next, in what order, how do you rotate that, and so on. That’s been a huge lift, and it’s not solved yet.”
