FERC Blocks ComEd's Cancellation of $20B, 1.8 GW Joliet Data Center TSA
FERC ruled September 22 that Commonwealth Edison cannot cancel its transmission security agreement with PowerHouse Hillwood, keeping alive a 1.8 GW, $20 billion data center campus in Joliet, Illinois. The dispute hinges on a $1 letter of credit and lands next in federal court.
The federal regulator refused to let a utility walk away from a grid agreement, and handed the dispute to a federal judge. The AI power grab just got a federal backstop.
Key takeaways
- FERC ruled September 22 that Commonwealth Edison cannot cancel its transmission security agreement with PowerHouse Hillwood, keeping alive a 1.8 GW, $20 billion data center campus planned for Joliet, Illinois.
- The dispute turns on a $1 letter of credit the developer posted as initial credit support, a figure FERC declined to rule on, punting the contract question to the U.S. District Court for the Northern District of Illinois.
- FERC tied the ruling directly to its broader large-load interconnection reform push, with RTOs and ISOs required to submit new pro forma cost-recovery rules by mid-November, rules that will govern Bitcoin miners and data centers alike.
The Federal Energy Regulatory Commission on September 22 rejected Commonwealth Edison's "notice of cancellation" of a transmission security agreement covering a 1.8 GW, $20 billion data center campus being developed by PowerHouse Hillwood Holding in Joliet, Illinois, as first reported by Utility Dive. The ruling keeps the project alive but does not resolve the underlying contract dispute, that question goes to federal court.
PowerHouse Hillwood is a joint venture between PowerHouse Data Centers and Hillwood Corp., a Perot family company. The planned campus spans roughly 795 acres and would consist of 24 two-story data center buildings across four phases. Joliet's city council approved the project in March 2026 by an 8-to-1 vote, though three residents subsequently filed a lawsuit against the city and the developers over those approvals.
ComEd, a subsidiary of Exelon, filed its cancellation notice with FERC on July 24, 2026. PowerHouse Hillwood moved to reject the cancellation on August 14. The original TSA between the two parties was accepted by FERC under docket ER26-1032.
A $1 Letter of Credit and a Federal Standoff
The contract fight centers on credit support requirements written into the TSA. PowerHouse Hillwood posted a $1 letter of credit, contending it satisfied the agreement's initial credit terms. ComEd disagreed and filed to cancel. FERC declined to adjudicate which reading is correct, instead sending the dispute to the U.S. District Court for the Northern District of Illinois, where a suit is already pending.
FERC Chairman Laura Swett and Commissioner Lindsay See, in a joint concurrence, framed the punt clearly: "Though we decline to assert primary jurisdiction over the interpretation of ambiguous contract terms involving credit support, our commitment to fair cost allocation, ratepayer protection, and regulatory clarity remains unwavering."
Commissioner David LaCerte was less diplomatic about the $1 posting itself. "The idea that $1 may provide appropriate security to any such agreement strikes me as an embarrassing legal fiction: insulting to the underlying ratepayers, stakeholders, and the grid itself that bear the real risk of this project. Treating that risk as collateralizable for less than the price of a cup of coffee to me trivializes the very obligations that such a guarantee purports to secure."
Commissioner David Rosner pointed to exactly why FERC's ongoing large-load rulemaking exists: "Requiring security deposits helps ensure both project viability and transparency. Cost-recovery agreements matter because they enable efficient and accurate planning, and ensure that project risks stay where they belong: with the developer, not the public."
What This Means for the Grid, and for Miners
The ruling is a data point that federal regulators will not let legacy utility resistance slow AI capex of this scale. A 1.8 GW project is enormous by any grid planning standard. FERC's refusal to let ComEd walk away, combined with its signal that the case underscores the "criticality" of large-load interconnection reform, makes clear which direction the regulatory wind is blowing.
Bitcoin miners in the PJM footprint, which covers Illinois and the ComEd service territory, are competing for the same interconnection queue slots, the same grid headroom, and the same electrons that a project like Joliet now has federal protection to consume. PJM has already moved to curtail large loads first during grid shortages. A 1.8 GW campus in a single county represents the kind of load concentration that reshapes regional grid math.
The $1 letter of credit dispute is not just a legal curiosity. It previews what happens when pro forma credit and cost-recovery rules don't exist for large-load interconnection. The FERC show-cause orders issued to RTOs and ISOs in June are designed to fix that gap.
However those rules land when the mid-November responses come in, any entity connecting to the grid as a large load, data center or mining operation, will operate under the resulting framework. Stronger security deposit requirements mean higher upfront capital and longer timelines for new projects seeking interconnection.
What to Watch
The U.S. District Court for the Northern District of Illinois will determine whether PowerHouse Hillwood's $1 letter of credit satisfied the TSA's credit requirements. If the court voids the agreement, FERC's refusal to cancel becomes moot and the project faces a restart from scratch. The mid-November RTO and ISO responses to FERC's show-cause orders will produce the pro forma large-load rules that govern every subsequent interconnection, the language that lands there sets the terms for the next decade of grid access disputes.
Sources
Frequently Asked Questions
What is a transmission security agreement (TSA) and why does it matter for data centers?
A transmission security agreement is a contract between a large electricity customer and a utility that governs the terms under which the customer connects to and draws power from the transmission grid. For a data center developer, the TSA is the foundational document that secures grid access, defines credit and cost-recovery obligations, and establishes who bears financial risk if the project is delayed or cancelled. Without a valid TSA, a project cannot move forward regardless of how much capital has been committed.
How does the Joliet data center ruling affect Bitcoin miners?
Miners in PJM territory compete for the same interconnection queue positions and grid capacity that projects like the Joliet campus are now securing with federal backing. A 1.8 GW load in a single service territory tightens regional capacity. The forthcoming pro forma cost-recovery and security deposit rules, due from RTOs and ISOs in mid-November, will apply to miners and data centers alike. Higher deposit requirements and stricter credit terms raise the cost and extend the timeline for any new large-load connection.
What are FERC's large-load interconnection show-cause orders and when do they take effect?
In June 2026, FERC issued show-cause orders to regional transmission organizations and independent system operators directing them to develop standardized rules for connecting large electricity loads to the grid, including pro forma cost-recovery agreements and security deposit requirements. RTOs and ISOs have until mid-November 2026 to submit their responses. The resulting rules will set the baseline terms for large-load interconnection across the country.
