CAISO is the organization that runs the high voltage grid serving about 80 percent of California. FERC guide Its staff has asked the CAISO Board of Governors to approve new rules for very large electricity users, such as AI data centers, at a meeting on October 28, 2026. CAISO stakeholder page The rules are a proposal. They take effect only after CAISO files them with FERC and FERC accepts them.
What is CAISO responding to?
FERC is the federal agency that oversees the rates and rules of the interstate grid. On June 18, 2026, it ordered CAISO and the utilities that own CAISO’s transmission lines to show that their rules for large users were fair, or else change them. Law firm analysis Those rules live in a tariff, which is the official rulebook a grid operator files with FERC. FERC preliminarily found that CAISO’s tariff did not define a large load, set no clear study process, and did too little to keep costs from shifting to other customers. FERC later paused the case so CAISO could write its own fix, and responses are due November 16, 2026. CAISO regulatory report
Which sites would count as a large load?
Under the staff proposal, a large load is an end user at one site that connects directly to the CAISO grid and has peak demand of 50 megawatts or more. CAISO memo A megawatt is a unit of electric power. A site connected through local distribution lines would fall outside the definition, and so would a site under 50 megawatts. CAISO says it will still study how those smaller or distribution connected sites affect the transmission grid. Pacific Gas and Electric has objected to the definition, and CAISO says it is working with the utility and the state utilities commission on new wording. Board presentation
What a new AI data center would be asked to do
The local utilities would keep running the studies that decide whether a new site can connect. CAISO expects each study to finish within 60 to 90 days, as FERC asked, and it would review new requests every month to keep pace. CAISO memo Once a site is running, the company that buys power for it would send CAISO hourly forecasts of its use. The forecast for the next day would be due by 7 a.m. Pacific time. Draft final proposal The site would also send live data on how much power it is drawing. When the grid is at risk, CAISO would order a cut and the utility would carry it out, because CAISO does not control the switches.
Some sites will be ready before the grid is. A network upgrade is new or larger equipment, such as a new line or substation, needed to carry the extra power. The proposal offers a temporary service that lets a site connect early and draw only what the grid can carry until its upgrades are built. Board presentation Each arrangement would be set by contract with the utility. The site moves to full service when the upgrades go into service.
| Issue | Before | Under the proposal |
|---|---|---|
| Definition of a large load | The tariff had no definition | One site on the CAISO grid using 50 megawatts or more at peak |
| Study timing | No study deadline in the tariff | Utility studies take 60 to 90 days with monthly CAISO review |
| Usage forecasts | No forecast rule for large sites | Hourly forecasts, with the next day due by 7 a.m. |
| Waiting for upgrades | No early service while upgrades are built | Temporary service limited to what the grid can carry |
| Cost information | No single public list of large load costs | CAISO posts expected additions, needed upgrades and cost estimates |
Who pays for the upgrades?
The utilities, not CAISO, would set the deposits and other terms that make a large load pay for its own upgrades. CAISO would publicly post the total large load additions it expects, the upgrades they need, and a cost estimate for each upgrade. CAISO memo When a site pays toward its upgrades, the utility would subtract that payment before its costs go into the regional charge that every CAISO customer pays. Draft final proposal The goal is to keep other customers from paying for equipment built for one site.
The timeline
After the board votes on October 28, CAISO plans to post revised tariff wording on October 29. Comments on that wording are due November 4, and the FERC filing is due November 16, 2026. CAISO stakeholder page The utilities are expected to file their own tariff changes the same day. Other parties can answer those filings by December 16, 2026. CAISO regulatory report FERC then decides whether to accept them. Two ideas are left for a later CAISO process, set to open in the first half of 2027. One is a permanent flexible service, and the other covers power plants that serve nearby large sites. Board presentation
Tomorrow’s topic
The Oklahoma Corporation Commission hearing on paying for OG&E’s AI data centers.