As large loads — including hyperscale data centers — seek to interconnect to a U.S. grid already strained by accelerating demand and aging infrastructure, federal transmission pricing has moved from a technical domain to the center of a national debate over fairness, affordability, and the future of grid investment. How transmission costs are allocated and recovered will shape who pays for the buildout the system urgently needs, and whether existing customers are protected as that buildout proceeds.

In ACEG’s December 2025 reply comments to FERC’s docket on large load interconnection, we argued that interconnecting large loads can be a win-win for all customers when paired with the right foundation: more proactively planned regional and interregional transmission, and cost allocation and rate design that protect existing customers while sharing the benefits of a stronger grid with new ones. Vol 1 of this two-part report — prepared by Grid Strategies and co-published with the Electricity Customer Alliance — is a primer on how federal transmission pricing got to where it is today and why the current framework looks the way it does. It walks through:

• The Federal Power Act’s division of authority between FERC and the states
• The cost causation and beneficiary-pays principles that anchor FERC’s “just and reasonable” standard
• The key orders — 888, 2000, 2003, 890, and 1000 — that shaped today’s framework
• How local, regional, and interconnection-related transmission costs are allocated and recovered in practice

Coming soon: Volume 2, Options for Ensuring Affordability and Reliability in an Era of High Load Growth, will identify and assess specific policy options FERC and the industry could adopt to ensure all transmission customers pay their fair share.

Co-published by Americans for a Clean Energy Grid and the Electricity Customer Alliance. Prepared by Grid Strategies.