Feds order CAISO to speed power for AI data centers; PG&E says developers pay
FERC told California’s grid operator to justify or change its large‑load hookup rules within 60 days, citing AI demand. Locally, PG&E says developers, not ratepayers, will fund new infrastructure, and a 100 MW NAS Lemoore project shows what’s coming.
Feds order CAISO to speed power for AI data centers; PG&E says developers pay
Key Takeaways
- FERC ordered all six U.S. grid operators, including CAISO, to reform or defend large‑load hookup rules within 60 days.
- The order aims to connect AI data centers faster while keeping states in charge of retail rates.
- PG&E says data center developers must pay for needed upgrades in the Valley, not regular customers.
- A 100 MW data center is planned at NAS Lemoore in Kings County, illustrating regional stakes.
A hundred megawatts. That’s the planned load for a Navy‑backed, AI‑optimized data center at NAS Lemoore in Kings County, big enough to power a small city by itself.
Federal regulators moved Thursday to clear a path for more projects like it. The Federal Energy Regulatory Commission told the nation’s six regional grid operators, including the California Independent System Operator, to either justify their existing rules for connecting very large customers or propose fixes within 60 days. A separate 30‑day report is due on how each operator will ensure enough generation to serve new big loads. CAISO is on that list.
Sixty days to answer.
The order tracks the Trump administration’s push to speed power to energy‑hungry AI data centers, but it keeps states in charge of retail rates, terms and conditions. That distinction matters in California, where the CPUC and local utilities manage how customer costs are assigned.
What changes for California
CAISO says data centers are the single largest new use case among “large loads,” and the state’s energy planners see the demand curve rising. As of January 2026, the California Energy Commission forecast data center load on the CAISO grid to increase by 1.8 gigawatts by 2030 and 4.9 GW by 2040. FERC’s order names CAISO directly and asks for reforms that speed studies, prevent cost‑shifts, and accommodate projects that bring their own generation or can curtail during grid stress.
Why it matters in the Valley
Fresno, Kern and Kings counties sit on major transmission corridors and have land where developers are already kicking tires. PG&E’s local spokesperson Jeff Smith told ABC30 in February that data center operators must cover the cost of new infrastructure up front, so other customers aren’t on the hook. That stance aligns with proposals from utilities elsewhere that large loads pay for the upgrades they trigger.
Kings County has the 100 MW NAS Lemoore plan on deck. In Kern County’s Indian Wells Valley, a separate proposal has drawn questions from residents about water and air impacts tied to backup generators. Those debates show what CAISO and local utilities will juggle as applicants chase power, land and water.
What to watch next
CAISO now has two clocks running, a 30‑day report on generation adequacy for large loads and a 60‑day filing to defend or change tariff rules. The agency has already launched a “large loads” initiative that lays out who studies what, and it points to the CEC forecast as a planning anchor. How those filings land will shape where and how quickly developers try to plug into the Valley’s grid. The rattle of rooftop chillers behind a tilt‑up in north Fresno is faint, but you can hear it.
"Those who are going to essentially benefit financially from the data center should be the ones to fund the necessary infrastructure," Smith said.
Central Valley AI is produced by the CVAI Newsdesk team and developed by Kaweah Tech, a regional firm that builds, deploys, and integrates AI solutions for businesses across California's Central Valley.