Section 202(c)

Section 202(c) of the Federal Power Act grants the US Department of Energy emergency authority to order electricity generation, transmission, or curtailment when a supply emergency threatens the grid. The DOE invoked the provision twice in 2026 specifically targeting behind-the-meter data-centre backup gas generation, a pattern that has recast a wartime-era statute as a tool for managing the power demands of hyperscale AI infrastructure .

Enacted as part of the Federal Power Act of 1935, Section 202(c) was originally designed for fuel-shortage or grid-stability emergencies, typically invoked during extreme weather or supply disruptions. behind-the-meter generation, where data centres run their own diesel or gas generators without drawing from the public grid, has created a novel application: large campuses can, in effect, opt out of grid constraints during peak demand. The Virginia Senate Finance Committee's proposed backup-generator fee is a parallel legislative response to the same dynamic.

The dual invocations in 2026 are significant because they establish that DOE treats data-centre BTM generation as a grid-emergency factor rather than a private operational matter. Each invocation opens a legal question about the scope of federal emergency authority over private generation assets, and the data-centre industry has pushed back on the interpretation. FERC has a supervisory role over Section 202(c) orders, adding a layer of regulatory complexity to each use. Ireland's EirGrid and SONI arrived at a comparable outcome by the opposite legal route: rather than invoking emergency, case-by-case powers, they wrote a 900 MW demand-loss ceiling directly into the standing grid code on 30 June 2026, live from July, curtailing behind-the-meter risk as a permanent rule rather than a one-off order.