FERC tells New York to rewrite its tariff to speed up data center hookups — and in the same week, the siting fights are turning into actual legal exposure. This is The Data Center Daily. Today: two more grid operators on FERC's clock, water scarcity getting a legal frame, and community blowback moving from PR headache to litigation risk. Three constraints, one docket cycle. Stick around — we're connecting all of it. This one's from JD Supra:
NYISO and its transmission owners are required to submit a response justifying the existing tariff language or proposing tariff revisions addressing FERC’s concerns within 60 days (i.e., by August 17, 2026). Order at P 38. The Order also directs NYISO to file an informational report within 30 days addressing “how NYISO intends to ensure that adequate generation will be available to serve existing and new large loads.”
FERC's June 18 order tells NYISO and its transmission owners to show cause why the tariff isn't unjust and unreasonable for large loads. It's the first one this week that names actual tariff language — the application process, the study process, co-location terms. And that puts a seventh operator in the crosshairs. Six in the blanket order, then NYISO and SPP landing separately. FERC's clearly working operator by operator, not waving one wand. Here's the line that actually has teeth — they're demanding a pro forma cost recovery agreement so the large load eats the network upgrades it triggers. Finally somebody puts in writing that the hyperscaler pays for its own steel, not the guy with the porch light. But this is a coastal market with its own interconnection mess. And NARUC's been screaming about state jurisdiction — so when NYISO's transmission owners file back, do the state PSCs get a seat, or do they find out after the fact? Exactly. This is a transmission-side move, which is the lane state regulators said they were watching. Mondaq writes:
On June 18, 2026, the Federal Energy Regulatory Commission (FERC or the Commission) issued an order to Southwest Power Pool, Inc. (SPP) directing SPP and SPP transmission owners to show cause as to why SPP’s tariff should not be unjust and unreasonable (Southwest Power Pool, Inc., 195 FERC ¶ 61,213 (2026) (Order)) because it fails to sufficiently:
On June 18, FERC ordered SPP and its transmission owners to show cause why the tariff isn't unjust and unreasonable. What FERC calls out is the large-load transmission study process, and cost shifting among transmission customers. Right after the NYISO order we just hit. Different market, very different load profile — SPP is the queue soaking up wind and solar across the middle of the country, not coastal hyperscaler demand. And read the actual charge — cost shifting onto transmission customers from large load. That's FERC saying out loud that data center hookups could land on everybody else's bill if SPP doesn't fix the tariff. Two ISOs on the clock in one week, both under Section 206, both told to show their work on large load. Now we find out whether six operators drafting homework at once converge on anything, or just produce six different tariff patches while the interconnection queue keeps stacking up. Akin Gump's authors also flag the alternative transmission technologies piece — FERC wants SPP to prove it's actually evaluating grid-enhancing tech before it builds new lines and bills it out. Here's ArentFox Schiff:
States are imposing disclosure, permitting, and conservation requirements on data center water usage. These measures reflect growing concerns that large-scale cooling operations are outpacing available water resources and placing unsustainable demands on municipal systems.
Ninety-seven percent of the water these things drink comes from municipal drinking systems — the same pipes feeding your kitchen tap. That's the number ArentFox put on the page, and it stopped me cold. And forty percent of US data centers sit in areas classified as high or extremely high water scarcity, per the same piece. So this isn't random siting — they're parking thirsty load right where the water's already short. Here's what gets me. Water sourcing never shows up in the grid interconnection filing. None of it. So when a drought restriction hits a county, it treats a 200-megawatt data hall exactly like somebody's lawn sprinkler. What's new here is the framing — ArentFox calls it a rapidly evolving compliance landscape. Water's moving from an operational footnote into a legal-risk category, the same direction the Virginia DEQ groundwater story was already pointing. Kelly Black, writing in Mondaq:
On June 2, 2026, the residents of Monterey Park, California, used their ballots to overwhelmingly oppose the prospect of a data center project ever being constructed in their city. Measure NDC (Community Act Prohibiting Data Centers) was endorsed by 88.1% of the City’s eligible voters as of the date of this article.
Monterey Park voters didn't write a strongly worded letter — they passed Measure NDC, a flat ban on data centers, on June 2nd. Overwhelmingly. That's a ballot box telling a developer, “never, not here.” And Fennemore frames the shift: community opposition now sits under legal risk, instead of just public relations — zoning challenges, attacks on the administrative record. Developers have to underwrite that now. Which is the dark joke. All week the lawyers told developers a robust administrative record protects you. Turns out the residents can build their own record and swing it the other way. Timing's the thing. This lands the same week Fairfax seats an interim director on a 2.24-million-square-foot application — David Allen's replacement takes that gavel into exactly this legal-risk environment. If The Data Center Daily helps you stay ahead, take a moment to subscribe and leave a review wherever you're listening. It really helps other people find the show, and it helps us keep bringing you the briefing.
What we're watching next: NYISO has to file an informational report within 30 days of the June 18 order on how it plans to ensure adequate generation for existing and new large loads. NYISO and its transmission owners also have an August 17, 2026 deadline on the tariff issues FERC flagged.
Links to the stories we covered are in the show notes if you want to dig in further. That's The Data Center Daily for today. This is a Lantern Podcast.