# Federal Power Act The 1935 New Deal statute that created federal jurisdiction over the interstate transmission and wholesale sale of electricity, originally as Part II of the Federal Water Power Act of 1920. It is the authority under which the [[Federal Energy Regulatory Commission]] operates, and its section numbers are the working vocabulary of every fight over who pays for the American grid. The Act's founding compromise is the one that still governs: **federal authority over wholesale and interstate, state authority over retail and generation siting.** Congress drew that line to fill a gap the Supreme Court had opened, where interstate power sales fell outside state reach and had no federal regulator. Ninety years later the same line decides whether a data center's grid upgrade lands on a wholesale tariff or a household bill. ## The sections that matter **Section 205 — utility-initiated rate filings.** A public utility proposes a rate or tariff change; FERC reviews it for whether it is "just and reasonable" and not unduly discriminatory. The burden sits with the filing utility, and there is a statutory clock. This is the ordinary path for market-design changes proposed by a [[Regional Transmission Organization]]. **Section 206 — Commission-initiated change.** FERC may find an existing rate or tariff unjust and unreasonable and order a replacement. Here **FERC carries the burden of proof**, which makes it the slower and legally riskier route — and also the one that lets FERC act when no utility wants to file. FERC's 2026 large-load intervention used six concurrent Section 206 show-cause proceedings rather than a single national rulemaking, a procedural choice that shifted the burden onto each RTO to defend its existing tariff. **Section 202(c) — emergency orders.** In an emergency "by reason of a sudden increase in the demand for electric energy, or a shortage of electric energy," the Secretary of Energy may order temporary generation, delivery, interchange or transmission of power, including operation in ways that would otherwise violate environmental limits. Originally a wartime provision, it has become a routine grid-management tool. > [!warning] 202(c) has been turned on the loads, not just the generators > On 2026-05-18 Energy Secretary [[Chris Wright]] issued **Order No. 202-26-23** in response to a PJM application filed the previous day. It authorized PJM and its transmission owners to direct data centers and other large loads with peak demand at or above **50 MW** that have their own backup generation to switch to that backup — within 15 minutes of an emergency signal — rather than draw from the grid during emergency conditions. Hospitals, 911 centers, water treatment, air traffic control and defense facilities are exempt. > > This is the emergency-powers version of the same question the tariff fights are about. When the grid is short, someone gets curtailed, and the order names who goes first. **Section 203** governs mergers and dispositions of jurisdictional facilities. **Section 201** contains the jurisdictional grant itself, including the reservation of retail and local distribution to the states. ## The 2026 stress test Three features of the Act are being tested simultaneously by AI-driven load growth: 1. **Whether load interconnection is federal at all.** The Department of Energy asserted in October 2025 that FERC holds jurisdiction over large loads connecting directly to the interstate system. FERC acted in June 2026 but expressly declined to claim that new jurisdiction, resting instead on its uncontested authority over transmission tariffs. The broader question is unresolved and will likely be litigated. 2. **Whether "just and reasonable" constrains cost-shifting.** The phrase is the Act's central standard and it is doing enormous work: it is the hook for requiring large loads to post credit support, the basis for finding behind-the-meter netting unjust, and the standard any challenge will be argued under. 3. **Whether emergency authority becomes ordinary.** Repeated 202(c) invocations inside a single control area in one year raise the question of when an emergency power stops describing an emergency. Compare the pattern documented in [[Emergency Powers Crosswalk]]. ## See Also - [[Federal Energy Regulatory Commission]] — the agency the Act empowers - [[Public Utility Commission]] — the state side of the jurisdictional line - [[Cost Allocation]] — what "just and reasonable" turns into in practice - [[Regional Transmission Organization]] — the tariff-holding entities regulated under Sections 205 and 206