Large load
The California ISO’s role in large loads
California faces a surge in electricity demand driven in part by new large loads and the California Independent System Operator (ISO) is committed to meeting new energy demand reliably, affordably, and equitably. Data centers present the largest use-case but electric vehicle charging, electrification of agricultural and industrial processes also will contribute to this growth. As of June 2025, the California Energy Commission (CEC) forecasts data center load to increase by 2.3 GW by 2030, and 3.3 GW by 2035. The ISO also is aware that utilities are receiving an increasing number of large load interconnection and service applications.
Given the interplay among the ISO, transmission service providers, utility distribution companies and load serving entities, the ISO recognizes the importance of clarity on roles in planning for large loads and this document describes the ISO’s current role in integrating large loads on the ISO system. It also identifies issues for future stakeholder discussions to refine processes for integrating large loads.
Today, the ISO plays a relatively small role in the actual interconnection of individual loads, large or small. Load and retail consumption are regulated by the state, and the ISO’s tariff generally addresses federal, wholesale sales. As such, utility tariffs and their state regulators generally govern the study, interconnection, rates, and cost recovery of new loads. The extent to which ISOs generally can or should be involved with the interconnection of large loads is a national issue that regulators are addressing.
To stay ahead of increasing load growth, the ISO works with the state energy agencies, utilities, and stakeholders.
The ISO also leads transmission capacity expansion planning for the networks in the ISO footprint, and the emergence of large load requirements must be addressed on a timely basis. A 2022 Memorandum of Understanding (MOU) among the CEC, California Public Utilities Commission (CPUC), and the ISO tightened the linkages between resource and transmission planning, interconnection, and procurement so California is better equipped to meet its reliability needs and clean-energy policy objectives required by Senate Bill 100.
Interconnection studies and cost recovery
Because load interconnections are for retail service, the utility tariff governs the rules for interconnection and cost recovery. The ISO does not study load interconnections, but accounts for these loads in using the CEC’s demand forecast for study assumptions, forecasts, and network models. If a developer plans to interconnect a wholesale generator or interconnects generation to the transmission grid, the ISO tariff will govern the interconnection and cost recovery of the generation but not the load, and the ISO will study the generation with the utility. The study costs, retail rates, and potential cost recovery for load interconnection facilities are governed by the local utility tariff, which is approved by the local regulator. In most cases in California, this is the CPUC. Energy services can be provided by utilities or others, in particular community choice aggregators, whose rates generally are not under CPUC jurisdiction. The ISO is aware of activities underway by utility distribution companies to update and revise their interconnection study processes and encourages interested parties to monitor those activities for their local service providers.
Technical requirements
Currently, uncertainty exists around the extent to which large loads will ultimately materialize and be designed and operated, including regarding their technical performance. The ISO’s current technical requirements focus primarily on performance issues affecting the grid. Each utility is responsible for ensuring that end-use customer performance does not impede meeting reliability requirements. Utilities also are responsible for developing technical standards for the design, construction, inspection, and testing for proposed interconnections of transmission facilities or loads to the larger transmission grid. Each utility’s standards are consistent with national reliability criteria set by regulators and implemented in consultation with the ISO.
The ISO is exploring the likely operating and ride-through characteristics of the load for various types of projects, and considering how to model them in the ISO’s studies. The ISO also will evaluate the potential impact of generation behind large loads. To the extent additional technical requirements are found to be needed, the ISO will coordinate with the utility distribution companies and other stakeholders on those requirements.
Load forecasting and transmission planning
As set out in the 2022 MOU, the CEC develops a statewide energy demand forecast, which incorporates information from utilities across the ISO footprint. The CEC’s demand forecast includes large loads mapped to substation locations used in the ISO’s transmission studies. Using the CEC’s forecast, the CPUC provides resource planning information to the ISO for its annual transmission planning process. The ISO also receives resource planning information from publicly owned utilities. The ISO uses these inputs to develop a final transmission plan and initiate development of the recommended transmission projects. Developers and stakeholders then use the transmission plan to understand where new transmission will be constructed and what capacity will be available.
Transparency and early communication of expected load growth are critical to ensure proactive planning and alignment with ISO processes and the ISO continues to work with the CEC and CPUC on refinements to processes described in the MOU.
Market operation
The ISO must ensure that operational large loads do not negatively affect reliability or ISO markets. Robust real-time communication among the ISO, utilities, and large load operators will be essential. Additionally, the ISO is exploring how best to enhance its short-term demand forecasting processes to account for increased demand from large loads. Transparency on large load consumption patterns is necessary to incorporate impacts in the ISO’s short-term demand forecasting and for ensuring these forecasts are accurate. The ISO will eventually need additional information to project potential fluctuations in demand from large loads.
The ISO also is working with industry partners to explore how large loads can participate in the ISO markets more efficiently, having launched its Demand and Distributed Energy Market Integration stakeholder working group in 2024 to discuss enhancements to the ISO’s demand-side policies. Interested stakeholders are encouraged to participate in this ongoing initiative.
Next steps
The ISO continues to coordinate on planning for integrating large loads with local, state, and federal regulators and explore these issues with utility and industry partners. The ISO will update this webpage as new information emerges. If the ISO determines that ISO policy changes are necessary, it will open a new stakeholder initiative to consider tariff changes.