A Briefing for General Counsel & In-House Legal Teams | Fall 2026
The energy regulatory landscape continues to evolve rapidly, creating new challenges and opportunities for utilities, energy infrastructure companies and other market participants. This briefing highlights ten developments that general counsel and in-house legal teams should be monitoring as they evaluate regulatory strategy, compliance obligations, commercial arrangements and infrastructure investment decisions.
1. FERC’s Large-Load Show Cause Orders Are Reshaping Interconnection Rules
In July 2026, FERC issued tailored show cause orders to all six regional grid operators, directing them to justify or reform tariff rules governing how data centers and large industrial loads connect to the grid. RTOs have 60 days to respond, meaning new tariff filings will land this fall. PJM has already signaled its response: a Board Decisional Letter forecasts 70 GW of new large-load demand by 2038 and announces a Reliability Backstop Procurement auction beginning September 2026 to address a roughly 60 GW capacity shortfall. If your company interconnects with the bulk power system, now is the time to evaluate your existing service agreements and participate in these stakeholder processes.
2. Natural Gas Pipeline Permitting Is Accelerating—But Execution Risks Remain
On May 21, 2026, FERC voted unanimously to propose the most sweeping overhaul of its natural gas blanket certificate program in 20 years, more than doubling the prior-notice cost limit to $86 million and expanding the categories of projects that pipelines can build without case-specific Section 7 authorization. The NOPR also extends blanket procedures to LNG facility activities for the first time. Comments closed July 27, and a final rule is expected this fall. Companies pursuing pipeline projects should lock in regulatory strategy now; faster timelines also mean shorter windows to intervene or negotiate.
3. Data Center Demand Is Rewriting the Cost Allocation Playbook
U.S. data center power demand is projected to exceed 41 GW this year and 66 GW in 2027. In late July, the White House expanded its Ratepayer Protection Pledge, now covering over 200 utilities, data center developers, cooperatives, and states representing 80% of power delivered to U.S. homes and businesses, establishing the principle that “large data center operators, not ratepayers, fund the electricity generation and infrastructure their projects require.” Electric utilities, cooperatives, and their large customers need to engage proactively on rate design, cost-sharing mechanisms, and contract structures before regulators decide for them.
4. NERC CIP Cybersecurity Compliance Obligations Have Expanded Significantly
CIP-003-9 took effect April 1, 2026, imposing new vendor remote-access controls, and CIP-012-2 became effective July 1, 2026. FERC has also directed NERC to expand standards to cover additional monitoring systems by mid-2026. Municipal utilities and electric cooperatives—even those classified as low-impact—face heightened compliance expectations and should review their programs now.
5. Transmission Formula Rate Proceedings Demand Closer Attention
FERC noticed a May 2026 workshop on electric transmission formula rate processes, signaling increased scrutiny of revenue requirements, implementation protocols, and annual updates. Participating transmission owners and their customers should audit formula rate inputs and prepare for potential compliance challenges or protests during the fall update cycle.
6. PURPA’s Qualifying Facility Framework Is in Flux
FERC reversed 40 years of precedent by denying QF status to a facility based on gross (rather than net) capacity—a sea change for developers and purchasing utilities alike. Combined with ongoing PURPA clarification proceedings on avoided-cost methodology and small power production thresholds, cooperatives and municipal utilities must reassess existing QF contracts and future purchase obligations.
7. Bipartisan Permitting Reform Legislation May Finally Cross the Finish Line
Congress has achieved rare bipartisan consensus that energy permitting is too slow. Legislation advancing in 2026 could extend beyond NEPA to encompass Clean Water Act reforms for pipelines and measures to accelerate interstate transmission siting. In-house teams should prepare for a faster-paced permitting environment, and the compressed comment periods that come with it.
8. “Behind the Meter” Generation Is Creating Novel Contractual and Regulatory Questions
A wave of behind-the-meter gas-plus-storage deployments, particularly for data center campuses, is testing existing interconnection agreements, wholesale market rules, and state commission authority. Companies considering on-site generation or co-location arrangements need to carefully navigate FERC jurisdictional boundaries, emissions obligations, and power purchase agreement structures.
9. Grid Reliability Risks Are Intensifying as the Resource Mix Shifts
On July 16, 2026, FERC ordered NERC to file new mandatory reliability standards for “computational loads” (data centers, crypto-mining facilities, and similar IT operations) by December 31, 2026, and to create a new NERC registration category for computational load entities. NERC has already issued a Level 3 Essential Action Alert, its highest urgency, on computational load modeling and control. PJM’s July 2026 capacity auction cleared nearly 7,000 MW short of its reliability requirement, underscoring the urgency. Contracts for capacity, ancillary services, and coordinated operations should be reviewed against these rapidly evolving reliability expectations.
10. Energy Affordability Is Now a Top Regulatory and Political Priority
From FERC’s “Ratepayer Protection Pledge” to state commission proceedings rebalancing rate design and cost recovery, consumer affordability is the dominant regulatory theme of 2026. Utilities—especially cooperatives serving residential and small-commercial members, should anticipate rate case scrutiny and proactively document how infrastructure investments deliver long-term value to customers.
Each of these developments creates both risk and opportunity. Whether you’re negotiating a power purchase agreement, navigating a FERC proceeding, ensuring regulatory compliance, or planning infrastructure investments, experienced outside counsel can help you stay ahead of the curve.
