At its Feb. 12, 2026, session, the New York State Public Service Commission (the Commission) issued an Order Instituting Proceeding and Soliciting Comments (the Order) in Case 26-E-0045 to advance “Energize NY Development,” an initiative Governor Kathy Hochul announced in her 2026 State of the State address to protect ratepayers and encourage regulatory certainty by reforming how large electric loads interconnect with the State’s electric grid.
The proceeding is intended to modernize interconnection policy for load-intensive facilities such as data centers, advanced manufacturing, and other industrial development, while protecting ratepayers, ensuring system reliability, supporting economic development, and maintaining consistency with the Climate Leadership and Community Protection Act (CLCPA).
Beyond setting forth the proceeding’s objectives, the Order provides a list of policy questions and corresponding comment deadlines, directs Department of Public Service (DPS) staff to convene a technical conference, and calls for the development of a whitepaper that will outline a policy framework for integrating large new electric loads into New York State’s electric grid.
Core Objectives and Policy Issues
New York is experiencing an unprecedented surge in proposed large load interconnections, with approximately 11.9 gigawatts in the New York Independent System Operator, Inc.’s (NYISO) queue as of February 2026, and more than 8.3 gigawatts added in 2025. The Commission explained that, given this rapid load growth, it is initiating this proceeding to ensure existing policies continue to align with the State’s “beneficiary pays” principle, which requires customers who benefit from certain grid upgrades to bear their associated costs, thereby protecting other ratepayers from subsidizing the infrastructure needed to serve these new large loads.
The Commission stated the proceeding will define analytical scope and policy workstreams, rather than adopt final rules at this stage. Consistent with that goal, the Commission outlined six principal objectives to guide the effort:
- Modernize interconnection processes for large electric loads;
- Improve transparency and predictability regarding grid upgrades and costs;
- Ensure large-load customers bear the system costs they impose;
- Maintain electric system reliability amid growing demand;
- Align large-load interconnection policy with CLCPA climate objectives; and
- Explore whether new large loads could place downward pressure on overall customer rates.
More specifically, the Commission indicated that the proceeding would do the following:
- Develop criteria to define and categorize “large loads,” including differentiated treatment for data centers and similar computational load facilities (e.g., cryptocurrency mining);
- Consider additional requirements for certain facilities, such as impact-based cost recovery, customer-supplied generation or storage, curtailment or flexibility obligations, long-term contracts, tariff revisions, or other mechanisms to protect reliability;
- Examine planning, modeling, and queue-management improvements (particularly regarding speculative load) to enhance transparency, forecasting accuracy, and interconnection efficiency;
- Assess clear and equitable impact-based risk- and cost-sharing arrangements for necessary grid upgrades; and
- Identify system and customer benefits, including opportunities for rate reductions and beneficial reuse of waste heat through coordination with thermal-energy-network initiatives.
Procedural Schedule and Next Steps
The Order directs the development of a whitepaper informed by input gathered during an upcoming technical conference and stakeholder responses to the following eight questions listed in Appendix A of the Order:
- How can large-load demand be accurately forecasted and verified before being included in long-term load forecasts and system planning studies?
- What innovative technology should be considered to improve interconnection cost estimates, reduce development time, and provide sensitivity analysis?
a. How has this technology been utilized, and what were the results? - What requirements should be applied to large loads and/or data centers to maintain grid reliability, protect ratepayers, and meet New York’s climate goals?
- What grid services such as load flexibility, demand response, on-site generation, energy storage, or alternative service be considered?
- How should cost allocation be structured to ensure data centers or similar facilities bear the cost they impose on the electric system?
- How can the State ensure transparency in the large-load interconnection process and information sharing?
- What interconnection rules should the Commission consider that would allow for leveraging of waste heat as part of thermal energy networks?
- What additional measures should the Commission consider as part of this proceeding to ensure large load and data centers are not causing cost increases to all other ratepayers, or adversely impacting reliability or the achievement of Climate Leadership and Community Protection Act objectives?
The Commission established an initial schedule outlining key milestones for stakeholder engagement and related deliverables:
- April 13, 2026: Deadline for comments on questions provided in Appendix A
- May 13, 2026: Deadline for comments in response to initial comments
- Before December 31, 2026: Technical conference to further explore issues discussed in the Order and stakeholder comments
- Before February 12, 2027: Issuance of a staff white paper proposing a structured path forward for large-load integration policy
Harris Beach Murtha’s Energy Industry Team is available to assist stakeholders in preparing and filing comments in this proceeding and to provide strategic guidance on interconnection, cost-allocation, and planning considerations affecting large-load and industrial/commercial customers.
If you need assistance or have questions, please reach out to attorney John T. McManus at (518) 701-2734 and jmcmanus@harrisbeachmurtha.com; attorney Jeffrey D. Kuhn at (518) 701-2746 and jkuhn@harrisbeachmurtha.com; attorney Joshua Schneider at (518) 701-2744 and jschneider@harrisbeachmurtha.com; or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York State in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains; as well as in Boston, Massachusetts, and Newark, New Jersey.
