Computational Load Owners and Operators

Foreword

Foreword

This professional reference is one of a series Energy Compliance, Inc. publishes for registered entities and the people who run their compliance programs.

I have spent more than thirty years on every side of the bulk electric system. I have operated control centers as a Reliability Coordinator, Transmission Operator, and Power System Operator. I have audited grid facilities and signed off on findings as a senior compliance auditor. I have worked enforcement matters from inside the regulator’s process. For the last several years I have advised registered entities directly through the firm I founded.

The entities that handle reliability well share a common habit. They take the standards seriously without confusing them with reliability itself. They know that a NERC Reliability Standard is a floor, not a ceiling. They know that compliance is what an auditor evaluates, but reliability is what the system either delivers or does not. They prepare for audits by building programs that survive real questions, not binders that look thick.

Becoming a NERC-registered functional entity is not a paperwork event. It is the moment a facility crosses from being a participant in someone else’s reliability obligation into being a holder of its own. The proposed Computational Load Entity registration extended that discipline to a population of facilities that had never carried it before. Since this series was first published, NERC’s Board has approved the registry criteria and the proposed CLO standards have passed their final ballot. This update covers who would register, what the three standards require, and when.

These references are written for the compliance manager who wants to understand the system, not just memorize requirements. For the legal counsel who has to brief a board honestly about what the next eighteen months of large-load regulation will require. For the senior planner or operator who is being told their system has a new kind of load and suspects the old planning assumptions no longer hold. And for the data center owner or engineering partner who has been told their facility may now be a registered entity, and wants to know what that actually means.

These references are not marketing material dressed as content. They come from three decades of doing this work and watching it succeed and fail. I have written them in the same voice I use in a control room or in front of a Regional Entity audit team. Direct, evidence-grounded, honest about what the standards do and do not require.

Energy Compliance, Inc. exists because most of the consulting offered to registered entities today is structured for billable hours rather than for outcomes. Every engagement is overseen by a senior practitioner. We do not bring five people to a meeting that needs one. We automate the work that should be automated. We apply senior judgment to the work that requires it. If that approach fits what you want in a compliance partner, the back of this reference tells you how to reach us. If not, the reference still belongs to you. Take what is useful. Apply it well. And remember the only test that ultimately matters: when the system needs to perform, does it?

Rob Smith

Founder and Principal, Energy Compliance, Inc.

Bloomington, Minnesota

How to Use This Reference

How to Use This Reference

This whitepaper is the October 2026 update to the Energy Compliance Large Load and Data Center Series. The five books below established the framework. This update reflects what changed once NERC’s Board approved the registry criteria and the industry balloted the CLO standards, and it supersedes the status descriptions in EC-WP-1002 where they differ.

The grid layer (EC-WP-1000)

What the demand shock is, why the existing planning and interconnection frameworks cannot absorb it, and how the federal and state interconnection regimes are being rebuilt in response.

The standards layer (EC-WP-1001)

NERC’s Large Load Action Plan, the Level 2 and Level 3 Alerts, the technical white papers, the reliability guideline, and the mandatory standards now under development.

The entity layer (EC-WP-1002)

The proposed Computational Load Entity registration, the three-part registration test, the registry criteria, and what becoming a NERC-registered functional entity actually requires.

The owner layer (EC-WP-1003)

The data center owner’s playbook under Texas Senate Bill 6: the interconnection trigger, the study-fee and site-control regime, the curtailment bargain, and the standalone-versus-co-located choice.

The operating layer (EC-WP-1004)

The compliance operating model for a registered computational load: internal controls, governance, evidence infrastructure, and the day-to-day disciplines that convert obligations into demonstrable compliance.

Every factual assertion in this reference is grounded in a primary source identified in the Sources and Authorities appendix. Where a regulatory matter was proposed or pending at the time of writing, it is described as such, and the reader is reminded to confirm current status before relying on it. Energy regulation in this area is moving on monthly timescales; the precise status of a docket or a NERC project at the time of reading may differ from the status at the time of writing.

Executive Summary

Executive Summary

The framework has a name, a threshold and a calendar. When Energy Compliance published its large load series in June 2026, NERC was proposing a single new registered entity called the Computational Load Entity, captured at 20 MW, 60 kV and 1 MW of IT load. Four months later that proposal is gone. In its place are two functional entities, the Computational Load Owner and the Computational Load Operator, a higher threshold of 50 MW total connected Load at 100 kV or above, and three proposed Reliability Standards that set out what those entities would be required to do.

Every CLO requirement described in this paper is proposed. The standards passed NERC's final ballot on October 14, 2026, and still need NERC Board adoption and FERC approval before any of them takes effect.

This paper documents what changed, what each proposed standard would require, and when the obligations are expected to arrive. It is written for the organizations that will carry them: data center owners and operators, the developers and lenders behind them, and the generation owners and EPC contractors building power plants to serve them. It does not repeat the policy background, registration mechanics or Texas analysis covered in EC-WP-1000 through EC-WP-1004; where those books describe the Computational Load Entity proposal, this paper supersedes them.

Six findings frame the analysis

• Registration is Board-approved and headed to FERC. On October 8, 2026, the NERC Board approved Rules of Procedure revisions creating the Computational Load Owner and Computational Load Operator and their registry criteria. FERC directed NERC to file initial standards by December 31, 2026, and directed NERC to develop the registry criteria, which it expects NERC to file by the same date.
• The threshold rose, and the IT-load test disappeared. The August 2026 posting replaced the 20 MW / 60 kV / 1 MW IT-load test with a site-based test: a Computational Load Site with total connected Load of at least 50 MW supplied at 100 kV or above from one or more points of connection.
• Three proposed standards define the job. CLO-001-1 covers interconnection, studies and modeling data. CLO-002-1 covers operational data, Operating Instructions and communications. CLO-003-1 covers protection coordination and disturbance monitoring. FAC-001 and FAC-002 receive conforming edits.
• Generator Owners are in scope. A Generator Owner whose Facility carries a site interconnection, or who owns the main power transformer serving a site, takes on obligations under CLO-001-1 and CLO-003-1. Projects that pair new generation with a data center need to allocate those duties in their contracts.
• Registration is expected to begin in 2027. NERC's implementation plans say so directly. Compliance obligations then phase in from three to thirty-six months after each standard's effective date, with the communications and Operating Instruction requirements of CLO-002-1 arriving at twelve months.
• More is coming. Two Phase 2 Standard Authorization Requests on event reporting, model validation and load-loss studies are out for comment through October 22, 2026, and a separate SAR addresses ride-through. FERC has required a Phase II workplan by March 1, 2027.

What to do with this

An organization that will own or operate a site of 50 MW or more at 100 kV or above should treat 2027 registration as the planning assumption, decide now which entity will register as owner and which as operator, and start building the data, communications and recording capabilities the standards require. Chapter 9 maps those actions to the requirements.

Chapter 1. Where Things Stand on October 17, 2026

Chapter 1. Where Things Stand on October 17, 2026

NERC is running two tracks in parallel under its Large Loads Action Plan. The registration track amends the Rules of Procedure to define who must register. The standards track, Project 2026-02, writes the Reliability Standards those registered entities must follow. Both answer the same FERC order, and both are aimed at the same filing deadline.

1.1 The FERC order

On July 16, 2026, FERC issued its Order Directing the North American Electric Reliability Corporation to File Reliability Standard(s) Pertaining to Computational Load Integration, 196 FERC ¶ 61,031, in Docket No. RD26-7-000. The order directs NERC to file new or modified Reliability Standards and associated Glossary definitions by December 31, 2026, directs NERC to develop Rules of Procedure revisions, including registry criteria, and expects NERC to submit them by the same date, and requires an informational filing with a Phase II workplan by March 1, 2027. The order allows NERC to submit the standards in phases and says FERC expects NERC to prioritize near-term measures capable of reducing identified risks while preserving flexibility for later refinement (PP 10–11). I read that as leaving the technical content of the Phase I standards to NERC's process: the order sets deadlines and priorities, not technical requirements.

1.2 Registration track

NERC posted initial registry criteria for the Computational Load Entity on April 1, 2026, for comment through May 15. On August 19 it posted revised criteria, with the two new functional entities and higher thresholds, for comment through September 18. NERC's third-quarter Large Loads Action Plan update reports that the Board approved the Rules of Procedure revisions on October 8, 2026, and authorized expedited procedures under Rules of Procedure Section 1606 to develop a Section 1600 data request supporting registration, pending FERC approval of the criteria. The same update says NERC plans to file the approved criteria with FERC.

Two points could not be confirmed from a primary source as of October 17, 2026: whether the text the Board approved differs in any respect from the August 19 posting, and the docket in which the criteria will be filed. This paper describes the August 19 text, which is the most recent version NERC has published.

1.3 Standards track

The Standards Committee accepted the Standard Authorization Request for posting on March 18, 2026, and authorized formal development on May 20. A 30-day formal comment period with a 10-day initial ballot ran from August 19 to September 18. All five standards and all three implementation plans passed that initial ballot. NERC then posted the final drafts for a final ballot that ran from October 9 to October 14, 2026, and all eight passed. NERC's project page posts the results, and a NERC newsroom post dated October 15 says the standards now go to the Board of Trustees for adoption, after which NERC will file them with FERC.

The final-draft standards list Board adoption as a Q4 2026 action, and NERC's third-quarter Large Loads Action Plan update describes a planned filing in Q4 2026. NERC's October 2026 project FAQ is more specific: in December 2026, it says, NERC will seek Board approval of the registry criteria, glossary terms and Reliability Standards and submit them to FERC by December 31. That sentence also puts Board approval of the registry criteria in December, and the Board acted on the criteria on October 8, so the FAQ's schedule reads as the plan before that action.

Source: NERC, Project 2026-02 Computational Loads project page, initial ballot (September 9–18, 2026) and final ballot (October 9–14, 2026) results, accessed October 17, 2026.

CLO-002-1, the operations standard, drew the lowest weighted approval of any item in the package in both rounds: 77.93% on the initial ballot and 78.13% on the final.

1.4 What is already in effect

None of the registration criteria or new standards is in effect. Two earlier NERC actions are. The Level 3 Essential Action Alert on Computational Load Modeling, Studies, Instrumentation, Commissioning, Operations, Protection, and Control, issued May 4, 2026, went to Transmission Planners, Planning Coordinators, Transmission Owners, Balancing Authorities, Reliability Coordinators and Transmission Operators, with responses due August 3, 2026. Its stated purpose covers existing and new computational loads, including computational load interconnecting with collocated generation. And the Reliability Guideline: Risk Mitigation for Emerging Large Loads, issued in May 2026, sets out voluntary practices. Neither applies directly to a data center; NERC's October 2026 project FAQ notes that the Alert applies only to existing registered entities. The Alert's essential actions are directed at the transmission and planning entities that interconnect large loads, and cover modeling, studies, commissioning, ride-through, fault recording and operational communications.

Chapter 2. Who Registers: The Owner, the Operator and the Site

Chapter 2. Who Registers: The Owner, the Operator and the Site

The August 2026 revision did more than raise a number. It moved the unit of analysis from an entity's IT load to a physical site, and it split one registered function into two.

2.1 The three definitions

The revisions add three terms to Rules of Procedure Appendix 2; the Project 2026-02 standards use the same terms. A Computational Load Site is one or more buildings, structures or installations at a single location that primarily contains information technology infrastructure used for creating, executing and delivering software applications and services; artificial intelligence training, deployment and delivery; cryptocurrency mining; or other computational activities at a data center, and that is supplied through electrical equipment connected to the Bulk-Power System. The Computational Load Owner is the entity that owns and maintains a Computational Load Site. The Computational Load Operator is the entity that operates one.

NERC notes that one candidate may be both, and would register for both functions. Where a developer owns the site and a separate company runs it, the default is two registrations. Where a site has several owners, operators or tenants, NERC's September 30, 2026 consideration of comments points to Joint Registration Organizations, Coordinated Functional Registration and written transfer agreements.

2.2 The threshold

Appendix 5B, as posted in August, captures a Computational Load Owner or Operator of a Computational Load Site with total connected Load of 50 MW or more, supplied through electrical equipment connected at 100 kV or above from one or more points of connection. Candidates must meet all of the criteria.

2.3 Why NERC raised the threshold

NERC's response to comments explains that, after the April posting, it expanded its analysis to sites planned to be operational by the end of 2027 and concluded that a 50 MW threshold would still address the aggregate risks it had identified. It also found that 50 MW is generally in alignment with some RTO and ISO large load definitions. On the move to 100 kV, NERC's September 30 consideration of comments points to its technical reasoning document and interconnection voltage analysis: at the 50 MW threshold, the difference between a 100 kV and a 60 kV test was only 2% of overall total load. The 1 MW IT-load test was dropped in favor of the site definition's requirement that the site primarily contain IT infrastructure. NERC clarified that industrial and commercial loads such as manufacturing facilities and large hospitals are not within scope, and that the Bulk Electric System definition is not being revised.

2.4 Multiple connections and co-location

The phrase from one or more points of connection responds to comments about sites served through multiple interconnections, shared substations and co-located generation. For configurations that remain unclear, including co-located arrangements, NERC states that it and the Regional Entities will develop an ERO Registration Reference document once the criteria are more final, as they did for Category 1 and Category 2 Generator Owners and Operators. In the meantime, NERC points to the Project 2026-02 FAQ, which diagrams several configurations. Until the reference document exists, complex configurations will turn on the Regional Entity's review.

2.5 The data request

The Section 1600 data request the Board authorized under expedited procedures is the first practical step toward building the registry. NERC describes it as supporting the registration of Computational Load Owners and Operators, pending FERC approval of the criteria. Its data fields and schedule had not been published on NERC's Large Loads Action Plan page as of October 17, 2026. NERC's response to comments on the April posting says that, because consumption data is commercially sensitive, NERC does not plan to collect it, and would treat any it did collect as Confidential Information used only for registration determinations.

Read across to EC-WP-1002

EC-WP-1002 described registration as a Computational Load Entity. Read that entity as superseded by the Computational Load Owner and Computational Load Operator functions, and the 20 MW / 60 kV / 1 MW test as superseded by the 50 MW / 100 kV site test described here.

Chapter 3. CLO-001-1: Interconnection, Studies, and Modeling Data

Chapter 3. CLO-001-1: Interconnection, Studies, and Modeling Data

CLO-001-1 is the planning-horizon standard. It governs how a Computational Load Site gets onto the system, how its effect on the system is studied, and what modeling data its owner must hand to planners for the life of the facility. Every requirement in it carries a Long-term Planning time horizon, which tells a new owner something useful: most of this work happens before energization and then recurs on a schedule, not in real time.

The standard is notable for how many parties it reaches. A Computational Load Owner is only one of them. Transmission Owners, Distribution Providers and Generator Owners that host a site interconnection, or that have signed an agreement to study one, take on obligations of their own. So do Planning Coordinators and Transmission Planners. A data center that connects through a generating facility pulls the Generator Owner into this standard.

3.1 Applicability

The functional entities are the Computational Load Owner, the Planning Coordinator and the Transmission Planner, plus any Transmission Owner, Distribution Provider or Generator Owner that has a Computational Load Site interconnection or a fully executed agreement to conduct a study for one. The facility test is the same one used throughout the package: a Computational Load Site with total connected Load of at least 50 MW, supplied through electrical equipment connected at 100 kV or above from one or more points of connection.

3.2 What the interconnecting utility must publish (R1–R3)

Requirements R1 and R2 put the first move on the Transmission Owner and Distribution Provider. Each must document interconnection requirements for Computational Load Sites, keep them current, and make them available on request. An entity that has never hosted such a site has 45 calendar days from a fully executed study agreement to produce them. The requirements must address, at a minimum, coordinated studies for new interconnections and for qualified changes, notification of affected systems, coordination with the Transmission Planner, Planning Coordinator, Transmission Operator, Balancing Authority and Reliability Coordinator, and coordination of commissioning.

R3 applies the same logic to Generator Owners. Where a Computational Load Site will connect through a Generator Owner's existing Facility, the Generator Owner must document its own interconnection requirements within 45 days of the study agreement, and those requirements must provide for coordination with the Transmission Owner and Distribution Provider. For a developer pairing new generation with a data center, R3 is the requirement to read first.

3.3 Studies and the qualified change (R4–R7)

R4 requires Transmission Planners and Planning Coordinators to study the reliability impact of each new site and each qualified change. The study must consider affected systems, adherence to Reliability Standards and planning criteria, steady-state, short-circuit and dynamics analysis as needed, and must document assumptions, alternatives considered and coordinated recommendations. R5 obliges the Computational Load Owner to coordinate on those studies, including by supplying data. R6 does the same for the Transmission Owner, Generator Owner and Distribution Provider.

R7 is short but consequential. Each Planning Coordinator must maintain a publicly available definition of what counts as a qualified change for a Computational Load Site. That definition determines when an owner's expansion, IT refresh or reconfiguration triggers a new study. Owners should obtain the definition from every Planning Coordinator whose footprint they occupy and build it into their internal change-management process, because a missed qualified change is a study that never happened.

3.4 Modeling data and verification (R8–R11)

R8 requires each Planning Coordinator and its Transmission Planners to jointly develop steady-state, dynamics and short-circuit data requirements for Computational Load Sites. Those requirements must cover cessation, tripping, ride-through and post-disturbance recovery parameters; the amount or percentage of IT infrastructure and its expected use or behavior; data format and level of detail; and a submission schedule of at least once every 13 calendar months, with additional submissions after commissioning and after qualified changes.

R9 turns that into an owner obligation. The Computational Load Owner must provide the modeling data its planners require. Where nothing has changed, a written confirmation satisfies the periodic submission. Dynamic models must be ones the Transmission Planner has accepted, or as otherwise agreed. Under R10, when a planner raises a technical concern about the data, the owner has 90 days to respond with corrected data or a technical justification, unless a longer period is agreed.

R11 is the requirement most likely to catch an owner unprepared. The Computational Load Owner must provide Model Verification documentation to its Transmission Planner within 365 days of placing the site in service, within 180 days of any change that alters the site's dynamic response, and at least once every ten years thereafter. Any parameter the owner cannot verify must be identified, with the reason. That obligation reaches into equipment and behavior the owner may not fully control, including the IT load itself, so the vendor contracts signed during construction need to secure the data.

Source: NERC, CLO-001-1 final ballot clean draft, October 2026.

Chapter 4. CLO-002-1: Operational Data and Communications

Chapter 4. CLO-002-1: Operational Data and Communications

CLO-002-1 is the operating-horizon counterpart to CLO-001-1. Its purpose is to give the Transmission Operator, Balancing Authority and Reliability Coordinator the data they need from Computational Load Sites, and to establish Interpersonal Communication capability and protocols between those operators and the sites. It is also the only standard in the package that creates obligations for the Computational Load Operator.

4.1 Data specifications (R1–R7)

R1 through R3 require the Transmission Operator, Balancing Authority and Reliability Coordinator each to maintain a documented data specification for Computational Load Sites. Each specification must identify the data needed and who must provide it, a process for resolving conflicts, deadlines or periodicity, availability and accuracy criteria, consistency between operating and planning models, a process for corrections, and a mutually agreeable format and secure transfer method. R4 through R6 require each of those entities to distribute its specification.

R7 is where the site owner and operator enter. Each Computational Load Owner and Computational Load Operator that receives a specification must satisfy it. The requirement carries Operations Planning, Same-Day Operations and Real-time Operations time horizons. In practice this means telemetry, data links and the processes that keep them available and accurate become compliance evidence, not just engineering conveniences.

4.2 Operating Instructions (R8–R9)

R8 requires each Computational Load Operator to comply with Operating Instructions issued by its Transmission Operator, Balancing Authority or Reliability Coordinator, unless compliance is physically impossible or would violate safety, equipment, regulatory or statutory requirements. R9 requires the operator to inform the issuer when it cannot comply. Both carry a High Violation Risk Factor. The package also modifies the Glossary definition of Operating Instruction to include commands that change or preserve the state, status, output or input of a Computational Load Site.

For a data center organization, this is the cultural pivot. A site that has always managed its own load to serve its tenants would, once CLO-002-1 is effective, take Operating Instructions from its Transmission Operator, Balancing Authority or Reliability Coordinator, and would need a documented basis for any refusal. NERC's FAQ adds that nothing in the Project 2026-02 standards changes the service priority agreed for a site.

4.3 Communications and training (R10–R15)

R10 and R11 require Interpersonal Communication capability between the Transmission Operator and Balancing Authority and each Computational Load Operator in their area. R12 requires the Transmission Operator and Balancing Authority to notify the entities identified in R10, the Computational Load Operators in their area, within 60 minutes of detecting a failure of their own Interpersonal Communication capability that lasts 30 minutes or longer, and R13 requires a Computational Load Operator that detects a failure to consult affected entities on restoration.

R14 requires the Computational Load Operator to train each operator who can receive an oral two-party, person-to-person Operating Instruction, before that person receives one, to repeat the instruction back and get confirmation or to ask that it be reissued. R15 requires the operator to do exactly that for any such instruction received during an Emergency. Burst messages are excluded. R10, R11 and R15 carry a High Violation Risk Factor, R12 and R13 Medium, and R14 Lower. For a data center organization that has not previously been registered with NERC, these would be new obligations.

Practical reading

CLO-002-1 is the standard that would require a trained, reachable point of contact for the grid operator. Owners that outsource facility operations should decide early which entity registers as the Computational Load Operator, because that entity carries R8 through R15. NERC's FAQ confirms that at a multi-tenant site a centralized or shared operating function can serve as the single accountable Computational Load Operator.

Chapter 5. CLO-003-1: Protection Coordination and Disturbance Monitoring

Chapter 5. CLO-003-1: Protection Coordination and Disturbance Monitoring

CLO-003-1 states its purpose as keeping Protection Systems at Computational Load Sites coordinated and making disturbance data available for analysis. Both subjects appear among the essential actions of NERC's May 2026 Level 3 Alert, which addressed protection and control and dynamic fault recording. Applicability covers the Computational Load Owner, Transmission Owner, Distribution Provider and Generator Owner, with the same 50 MW and 100 kV facility test.

5.1 Recording capability (R1–R6)

R1 requires each Computational Load Owner to have sequence of event recording data for breaker position on the buses, main power transformer, on-site generation and static or dynamic reactive devices it owns. R2 places fault recording on whoever owns the main power transformer, whether that is the Computational Load Owner, Transmission Owner, Distribution Provider or Generator Owner. For this standard, a footnote defines the main power transformer as "the power transformer and its associated equipment that steps down the voltage for the Computational Load Site from its nominal transmission/interconnecting system voltage." The recording must sit on the high side of that transformer or at a common point of connection and capture phase-to-neutral voltages, phase and neutral currents, and three-phase real and reactive power.

The technical specifications are explicit. Fault records must include at least two cycles of pre-trigger data, a total record length of at least 2.0 seconds, and a minimum recording rate of 64 samples per cycle, with triggers on neutral overcurrent, over- and under-voltage, and over- and under-frequency (R3). The main power transformer owner must also have continuous dynamic disturbance recording with storage (R4), sampled at 960 samples per second or more with an output rate of at least 60 per second (R5). All recording must be time-synchronized to UTC within plus or minus one millisecond (R6).

5.2 Data retention and delivery (R7–R8)

R7 requires the data to be retrievable for 20 days and provided within 15 days of a request from the Transmission Planner, Planning Coordinator, Transmission Operator, Balancing Authority, Reliability Coordinator, Regional Entity or NERC. Sequence of event data goes in ASCII CSV per the standard's attachment; fault and dynamic disturbance records go in CSV or COMTRADE (IEEE C37.111-1999 or later), with file names following IEEE C37.232-2011 or later. R8 requires a recording failure to be restored within 90 days or covered by a Corrective Action Plan submitted to the Regional Entity within that window.

5.3 Protection settings (R9–R10)

R9 requires each Computational Load Owner to establish a process for developing protection settings that includes coordination with the owners of electrically joined equipment: responding to their proposed settings, resolving coordination issues before implementation, and communicating later revisions. R10, with a High Violation Risk Factor and an Operations Planning horizon, requires the owner to follow that process. The evidence an auditor will look for is not the settings themselves but the record of coordination around them.

Source: NERC, CLO-003-1 final ballot clean draft, October 2026.

Chapter 6. FAC-001-5, FAC-002-5 and the Generator Owner's Exposure

Chapter 6. FAC-001-5, FAC-002-5 and the Generator Owner's Exposure

The package revises two existing standards. NERC's FAQ describes the change as a narrow update to the applicability sections of FAC-001 and FAC-002. The revisions add the Computational Load Site definition and a new exclusion: end-user Facilities and third-party Facilities, as those standards use the terms, exclude Computational Load Sites "subject to the CLO-001 standard," in the words of the final FAC-001-5 and FAC-002-5 redlines (Section 4.2). NERC describes these as conforming edits. Their purpose is to prevent a site from being studied and connected under two overlapping sets of requirements.

The more important point for generation developers lies elsewhere in the package. Generator Owners appear in the applicability of both CLO-001-1 and CLO-003-1. A Generator Owner whose Facility will carry a Computational Load Site interconnection must document interconnection requirements under CLO-001-1 R3 and coordinate on studies under R6. A Generator Owner that owns the main power transformer serving a site carries the fault recording and dynamic disturbance recording obligations of CLO-003-1 R2 through R8.

That matters for every project where generation is built to serve a data center. Where the plant's owner is a registered Generator Owner and meets the applicability conditions above, this package adds interconnection, study and disturbance-monitoring duties tied to the load the plant serves. The ownership of the main power transformer, and which side of it each party owns, should be settled in the project agreements with these requirements in view. NERC's FAQ notes that CLO-003-1 does not preclude separate agreements for another entity to install and maintain the recording equipment.

For generation developers and EPCs

Map the one-line before contracts are signed. The owner of the main power transformer serving the site carries CLO-003-1 recording obligations. The owner of the Facility the site connects through carries CLO-001-1 R3. Neither follows automatically from who owns the data center.

Chapter 7. Effective Dates and the Compliance Calendar

Chapter 7. Effective Dates and the Compliance Calendar

The three implementation plans share one base mechanic. Where regulatory approval is required, each standard becomes effective on the first day of the first calendar quarter after the effective date of the applicable governmental authority's order approving it. Individual requirements then phase in from that date. The plans also state that Computational Load Owners are expected to be registered beginning in 2027.

The effective date depends on a FERC order that does not yet exist, so no calendar date can be stated today. The sequence can, in months after the effective date.

Source: NERC, Project 2026-02 implementation plans, final ballot versions, October 2026.

The CLO-003-1 plan works an example: with an assumed effective date of April 1, 2027, sites already in service would comply with R1 through R8 by April 1, 2030. Both the CLO-002-1 plan (for R8 through R15) and the CLO-003-1 plan (for R1 through R8) let an entity ask the Compliance Enforcement Authority for more time when circumstances beyond its control, such as supply chain delays, intervene. Only sites in service within twelve months after the effective date qualify; the request is due at least three months before the compliance date.

The phase-in favors existing sites on disturbance monitoring and nobody on communications. At twelve months, every registered Computational Load Operator would need working Interpersonal Communication capability, trained personnel and a process for Operating Instructions. Plan backward from that date.

Chapter 8. What Comes Next

Chapter 8. What Comes Next

Project 2026-02 is Phase 1. NERC has said so from the start, and FERC's order built the second phase into its directives by requiring a Phase II workplan by March 1, 2027. Three pieces of that second phase were already visible in October 2026.

8.1 Phase 2 Standard Authorization Requests

Two SARs drafted by the Large Loads Working Group were posted on September 23, 2026, for industry comment through October 22, 2026. NERC's third-quarter update says that once comments are implemented, the Reliability and Security Technical Committee and the Standards Committee will be able to endorse and accept them in December.

Event reporting, model validation and model quality. The first SAR would require analysis and reporting of unexpected Computational Load Site performance, misoperations and customer-initiated load reduction events, in a manner similar to PRC-030 for inverter-based resources. It would allow the Balancing Authority, Transmission Operator, Reliability Coordinator or Regional Entity to request event reviews, and would require Computational Load Owners to validate dynamic models against measured events, in the manner of MOD-026. It would also set model quality assessment requirements for Transmission Planners and Planning Coordinators.

Load loss in planning and operations studies. The second SAR proposes changes to TPL, FAC and IRO standards so that planners and operators model the loss and reconnection of individual sites and clusters of sites, add load loss to the Reliability Coordinator's System Operating Limit methodology, and identify the largest single-contingency load loss.

8.2 Ride-through

A separate SAR, Reliability Standards to Address Computational Load Disturbance Performance, would establish minimum voltage and frequency ride-through, rate-of-change-of-frequency withstand and post-fault active power recovery requirements, with related Glossary terms. NERC's third-quarter 2026 Large Loads Action Plan update reports that it was open for comment from August 26 to September 24, 2026, that the Large Loads Working Group would meet on October 13 to approve the final SAR, and that the working group would seek Reliability and Security Technical Committee endorsement on October 20 and present the SAR to the Standards Committee on October 21. NERC's October 2026 project FAQ notes that the Large Loads Working Group's SAR roadmap ranks ride-through as a high priority and identifies a possible 2027 SAR addressing generation co-located with Computational Load Sites.

8.3 Texas runs ahead

Owners in ERCOT do not need to wait for NERC to face ride-through obligations. ERCOT's NOGRR282, Large Computational Load Ride-Through Requirements, and NPRR1308, which defines Large Computational Load, were approved by the Public Utility Commission of Texas on July 9, 2026, in Project No. 54445, with an effective date of August 1, 2026. NOGRR289 shows how far ride-through reaches inside a site: it would give a Large Computational Load 365 days after its in-service date to meet the requirements where its cooling load cannot; ERCOT's NOGRR289 page, checked October 17, 2026, lists it as pending. The Reliability and Operations Subcommittee granted it urgent status and tabled it on August 6, 2026, and ERCOT filed comments on September 25.

The PUCT's Senate Bill 6 rulemakings continue in parallel. The Commission's order adopting new 16 TAC §25.370, ERCOT Large Load Forecasting Criteria, in Project No. 58480 was filed on February 6, 2026. New 16 TAC §25.205, on net metering arrangements involving a large load customer co-located with an existing generation resource, was adopted in Project No. 58479; the Texas Register published the adoption on April 10, 2026, with an effective date of April 15, 2026. The order adopting new 16 TAC §25.194, Large Load Interconnection Standards, in Project No. 58481 was filed on September 18, 2026, and a Texas Register acknowledgement filed the same day lists an effective date of October 8, 2026. Among other things, §25.194 requires a large load customer, before it can be included in an ERCOT interconnection study, to execute an intermediate agreement, provide certain disclosures and post financial security of $50,000 per MW. EC-WP-1003 covers the Texas framework in depth.

Chapter 9. Building the Program Before Registration

Chapter 9. Building the Program Before Registration

The standards have not taken effect, but many of the decisions that bear on compliance are made before a site is registered: in interconnection agreements, equipment purchase orders, operating contracts and site designs.

EC-WP-1004 describes how a compliance program is built and defended under NERC's Compliance Monitoring and Enforcement Program. The table below does something narrower. It maps each obligation in the new standards to the decision an owner or operator should make before registration, and to the evidence an auditor will eventually ask to see.

9.1 For generation developers and EPC contractors

Where a plant is built to serve a data center, three questions should be settled before the engineering, procurement and construction contract is signed. First, which entity will own the Facility through which the site connects, because that entity carries CLO-001-1 R3 and R6. Second, which entity will own the main power transformer serving the site, because that entity carries the CLO-003-1 recording obligations. Third, how the generator's own registration as a Generator Owner or Generator Operator will be coordinated with the site's registration as Computational Load Owner and Operator, given NERC's statement that co-located configurations will be addressed in a forthcoming registration reference document.

9.2 For data center owners

The operational standard is where most data center organizations will feel the change. CLO-002-1 asks a facility that has historically answered only to its tenants to accept Operating Instructions from a grid operator, maintain Interpersonal Communication capability, train operators to repeat back Operating Instructions and keep records proving all of it. The twelve-month phase-in for those requirements is shorter than the procurement and staffing cycle at many organizations. Planning should start from that date and work backward.

Glossary of Terms

Glossary of Terms

Balancing Authority (BA). Per the NERC Glossary, the responsible entity that integrates resource plans ahead of time, maintains Demand and resource balance within a Balancing Authority Area, and supports Interconnection frequency in real time.

Bulk-Power System (BPS). Per the NERC Glossary, facilities and control systems necessary for operating an interconnected electric energy transmission network, and electric energy from generation facilities needed to maintain transmission system reliability; it excludes facilities used in local distribution.

COMTRADE. The IEEE C37.111 common format for transient data exchange, one of the formats CLO-003-1 permits for fault and dynamic disturbance records.

Computational Load Owner (CLO). The entity that owns and maintains a Computational Load Site.

Computational Load Operator (CLOP). The entity that operates a Computational Load Site.

Computational Load Site. One or more buildings, structures or installations at a single location that primarily contains information technology infrastructure for software applications and services, artificial intelligence, cryptocurrency mining or other computational activities at a data center, and that is supplied through electrical equipment connected to the BPS.

Dynamic disturbance recording (DDR). Continuous recording of voltages, currents, power and frequency used to analyze system dynamics; required at Computational Load Sites under proposed CLO-003-1 R4–R5.

Fault recording (FR). Triggered recording of high-resolution electrical quantities during a fault or disturbance; required under proposed CLO-003-1 R2–R3.

Interpersonal Communication. Per the NERC Glossary, any medium that allows two or more individuals to interact, consult or exchange information; required between operators and Computational Load Operators under proposed CLO-002-1.

Large Computational Load (LCL). An ERCOT term defined in NPRR1308, distinct from the NERC terms above.

Operating Instruction. Per the NERC Glossary, a command by operating personnel responsible for Real-time operation of the interconnected Bulk Electric System to change or preserve the state, status, output or input of an Element or Facility of the Bulk Electric System; Project 2026-02 proposes to extend it to Computational Load Sites.

Planning Coordinator (PC). Per the NERC Glossary, see Planning Authority: the responsible entity that coordinates and integrates transmission Facilities and service plans, resource plans and Protection Systems.

Qualified change. A change to a Computational Load Site, as defined publicly by each Planning Coordinator under proposed CLO-001-1 R7, that triggers a new interconnection study.

Reliability Coordinator (RC). Per the NERC Glossary, the entity that is the highest level of authority responsible for the Reliable Operation of the Bulk Electric System, with the Wide Area view and the authority to prevent or mitigate emergency operating situations.

Section 1600 data request. A data request NERC develops under Section 1600 of its Rules of Procedure; on October 8, 2026, the Board authorized expedited procedures under Section 1606 for one supporting CLO and CLOP registration.

Sequence of event recording (SER). Time-stamped recording of breaker status changes; required under proposed CLO-003-1 R1.

Standard Authorization Request (SAR). The request on which a NERC standards project is based; the Standards Committee accepted the Project 2026-02 SAR for posting on March 18, 2026.

Transmission Operator (TOP). Per the NERC Glossary, the entity responsible for the reliability of its local transmission system, and that operates or directs the operations of the transmission Facilities.

Transmission Planner (TP). Per the NERC Glossary, the entity that develops a long-term (generally one year and beyond) plan for the reliability (adequacy) of the interconnected bulk electric transmission systems within its portion of the Planning Authority area.

How Energy Compliance Can Help

How Energy Compliance Can Help

Every obligation in this paper lands before a site is registered: in the registration analysis, the owner-and-operator split, the project agreements and the operating contracts. Here is where we can help.

Registration and applicability analysis. Whether each site meets the 50 MW and 100 kV test counting every point of connection, which legal entity registers as Computational Load Owner and which as Computational Load Operator, and where a Generator Owner that hosts the interconnection or owns the main power transformer picks up CLO-001-1 R3 and CLO-003-1 R2 through R8. We also prepare the registration file and work the Regional Entity's review.

Compliance program design for a first-time registrant. CLO-002-1 asks a data center to take Operating Instructions, keep Interpersonal Communication capability and train the people who answer the phone. We build the procedures, the training records and the data pathway to the Transmission Operator, Balancing Authority and Reliability Coordinator specifications, and we set up the evidence so it is ready when the first audit notice arrives.

Evidence and audit defense. The modeling submissions, qualified-change logs, recorder commissioning tests and coordination records described in Chapter 9 are the evidence an auditor will ask for once the CLO standards are enforceable. We build that record to hold up, and we defend it.

WattOps Compliance is EC's NERC compliance evidence platform (wattopscompliance.com). We will run one standard at one facility through WattOps at no cost, CIP standards excluded, so you can see what your evidence looks like before an auditor does.

RenewOps is EC's renewable operations monitoring and analytics platform, and it includes a Data Center module. If a site's operations data will have to answer to a grid operator under CLO-002-1 R7, start there.

If you own, serve or operate a site that may cross the threshold, call me before the contracts are signed. We will tell you plainly where you stand and what to do first.

Website: energycomplianceinc.com · Email: [email protected] · Phone: 763.438.4427

About the Author

About the Author

Rob Smith is the Founder and Principal of Energy Compliance, Inc., with more than thirty years in the industry on every side of the system. He began in control-room operations as a Reliability Coordinator, Transmission Operator, and Power System Operator across RTO/ISO and utility control centers. On the regulator side, he was a senior compliance auditor and subject matter expert for NERC Reliability Standards. He audited grid facilities, evaluated mitigation adequacy, participated in risk-based oversight of utility mitigation activities, and supported the development of violation notifications and settlements in FERC-directed enforcement actions. He conducted a regulatory audit in the Sultanate of Oman against the Sultanate's Sector Law and Grid Code.

He founded Energy Compliance, Inc. to deliver senior regulator-side compliance authority without the layered staffing and billable-hour overhead of larger firms.

Education:

• MBA, Energy Management, University of Mary
• MSL, Compliance Law, Fordham Law University
• BAS, Energy Management, Bismarck State College
• BAS, Mechanical Engineering, Metallurgy minor, University of Florida
• BAS, Criminology, St. Petersburg College (State Law Enforcement Certification)
• AAS, Power Plant Technology, Bismarck State College
• AAS, Electrical Transmission System Technology, Bismarck State College

Certifications: NERC Lead Auditor training; previously NERC-certified at the Reliability Coordinator level; 1st Class A Boiler Engineer License, Minnesota.

About Energy Compliance, Inc.

About Energy Compliance, Inc.

Energy Compliance, Inc. is a regulatory compliance consultancy serving the energy sector, with a focus on NERC, FERC, and RTO/ISO compliance and a particular concentration in the Texas PUCT and RTO/ISO markets. The firm helps registered entities and prospective registrants navigate the full compliance lifecycle, from registration and program design through evidence development, RSAW production, mitigation, and audit defense. That range positions it directly to support organizations facing a computational load registration determination.

The firm’s approach is built on a research-analyst-first discipline: every conclusion is tied to an authoritative source, and every deliverable is built to stand up to regulator scrutiny. That discipline extends to the firm's two platforms: WattOps Compliance, EC's NERC compliance evidence platform, and RenewOps, EC's renewable operations monitoring and analytics platform, which includes a Data Center module.

This whitepaper is the October 2026 update to the Energy Compliance Large Load and Data Center Series, a multi-volume analysis of how the integration of data centers and other large computational loads is reshaping bulk-power-system reliability and the compliance obligations of the entities that build, serve, and operate them.

To learn more, or to assess whether a specific facility meets NERC’s computational load registry criteria, visit energycomplianceinc.com, email [email protected], or call 763.438.4427.

Sources and Authorities

Sources and Authorities

Federal Energy Regulatory Commission

• Order Directing the North American Electric Reliability Corporation to File Reliability Standard(s) Pertaining to Computational Load Integration, 196 FERC ¶ 61,031, Docket No. RD26-7-000 (July 16, 2026). https://www.ferc.gov/sites/default/files/2026-07/RD26-7-000.pdf
• PJM Interconnection, L.L.C., Order on Rehearing, Clarification, Compliance Filing, and Paper Hearing, 195 FERC ¶ 61,209, Docket No. EL25-49-002 et al. (June 18, 2026), background on co-location. https://www.ferc.gov/sites/default/files/2026-06/EL25-49-002_0.pdf

NERC: Rules of Procedure and registration

• Computational Load Entity, Proposed Rules of Procedure Revisions Summary (April 1, 2026). https://www.nerc.com/globalassets/who-we-are/rules-of-procedure/proposed/computational-load-entity-summary-of-changes-april-2026-posting.pdf
• Computational Loads, Proposed Rules of Procedure Revisions Summary (August 19, 2026). https://www.nerc.com/globalassets/who-we-are/rules-of-procedure/proposed/computational-load-owner-or-operator-summary-of-changes-august-2026-posting.pdf
• Proposed Appendix 5B, Statement of Compliance Registry Criteria, clean, August 2026 posting. https://www.nerc.com/globalassets/who-we-are/rules-of-procedure/proposed/appendix-5b-clean---august-2026-posting.pdf
• Consideration of Comments, Rules of Procedure Revisions to Appendices 2, 5A, and 5B (Computational Load Entities), responding to the April posting (August 19, 2026). https://www.nerc.com/globalassets/who-we-are/rules-of-procedure/proposed/response-to-comments-document-for-august-posting.pdf
• Consideration of Comments, Rules of Procedure Revisions to Appendices 2, 5A, and 5B (Computational Load Owner and Computational Load Operator), responding to the August posting (September 30, 2026). https://www.nerc.com/globalassets/who-we-are/rules-of-procedure/proposed/consideration-of-comments-from-august-posting.pdf
• Large Loads Action Plan, Q3 2026 Update. https://www.nerc.com/globalassets/initiatives/large-loads-action-plan/llap-quarterly-update-q3-2026.pdf
• Large Loads Frequently Asked Questions (August 2026). https://www.nerc.com/globalassets/initiatives/large-loads-action-plan/large-loads-faqs.pdf
• Glossary of Terms Used in NERC Reliability Standards (accessed October 17, 2026). https://www.nerc.com/standards/glossary-of-terms

NERC: Project 2026-02 Computational Loads

• Project 2026-02 Computational Loads project page, including initial and final ballot results (accessed October 17, 2026). https://www.nerc.com/standards/reliability-standards-under-development/2026-02-computational-loads
• Frequently Asked Questions, Computational Loads: Registry Criteria and Project 2026-02 Standards (October 2026). https://www.nerc.com/globalassets/standards/projects/2026-02/final-ballots/project-2026-02-faq---october-2026.pdf
• Standard Authorization Request, Reliability Standards to Address Computational Load, Phase I (February 20, 2026; revised May 11, 2026). https://www.nerc.com/globalassets/standards/projects/2026-02/sar-comment-period/project-2026-02-computational-loads-sar-clean-052026.pdf
• CLO-001-1, final draft, clean (October 2026). https://www.nerc.com/globalassets/standards/projects/2026-02/final-ballots/project-2026-02-computational-loads-clo-001-1-final-clean.pdf
• CLO-002-1, final draft, clean (October 2026). https://www.nerc.com/globalassets/standards/projects/2026-02/final-ballots/project-2026-02-computational-loads-clo-002-1-standard-final-clean.pdf
• CLO-003-1, final draft, clean (October 2026). https://www.nerc.com/globalassets/standards/projects/2026-02/final-ballots/project-2026-02-computational-loads-clo-003-1-standard-final-clean.pdf
• FAC-001-5, final draft, redline (October 2026). https://www.nerc.com/globalassets/standards/projects/2026-02/final-ballots/project-2026-02-computational-loads-fac-001-5-final-redline.pdf
• FAC-002-5, final draft, redline (October 2026). https://www.nerc.com/globalassets/standards/projects/2026-02/final-ballots/project-2026-02-computational-loads-final-redline-fac-002-5.pdf
• Implementation Plan, CLO-001-1, FAC-001-5 and FAC-002-5, final (October 2026). https://www.nerc.com/globalassets/standards/projects/2026-02/final-ballots/project-2026-02-computational-loads-clo-001-1-implementation-plan-final-clean.pdf
• Implementation Plan, CLO-002-1, final (October 2026). https://www.nerc.com/globalassets/standards/projects/2026-02/final-ballots/project-2026-02-computational-loads-clo-002-1-implementation-plan-final-clean.pdf
• Implementation Plan, CLO-003-1, final (October 2026). https://www.nerc.com/globalassets/standards/projects/2026-02/final-ballots/project-2026-02-computational-loads-clo-003-1-implementation-plan-final-clean-1.pdf
• Final ballot announcement, Final Ballots Open through October 14, 2026. https://www.nerc.com/globalassets/standards/projects/2026-02/final-ballots/2026-02_final_ballot_word_announcement_10726.pdf
• NERC newsroom, NERC's Computational Loads Standards Pass Final Ballot, Advance to Board Adoption (October 15, 2026). https://www.nerc.com/newsroom/nercs-computational-loads-standards-pass-final-ballot-advance-to-board-adoption

NERC: alerts, guidelines and Phase 2

• Level 3 Essential Action Alert, Computational Load Modeling, Studies, Instrumentation, Commissioning, Operations, Protection, and Control (May 4, 2026). https://www.nerc.com/globalassets/programs/bpsa/alerts/level-3-computational-load-alert.pdf
• Reliability Guideline: Risk Mitigation for Emerging Large Loads (May 2026). https://www.nerc.com/globalassets/our-work/guidelines/reliability/RG_Risk-Mitigation-For-Emerging-Large-Loads.pdf
• Draft SAR, Reliability Standards to Address Computational Load Event Reporting, Model Validation, and Model Quality Assessment (posted September 23, 2026). https://www.nerc.com/globalassets/who-we-are/standing-committees/rstc/llwg/sar_computational_load_event_reporting_firstdraft.pdf
• Draft SAR, Studying Computational Load Loss in Planning and Operational Reliability Studies (posted September 23, 2026). https://www.nerc.com/globalassets/who-we-are/standing-committees/rstc/llwg/sar_studying_computational_load_loss_planning_firstdraft.pdf
• Draft SAR, Reliability Standards to Address Computational Load Disturbance Performance (comment period August 26 – September 24, 2026). https://www.nerc.com/globalassets/initiatives/large-loads-action-plan/draft_sar_computational_load_disturbance_performance-1.pdf

ERCOT and Public Utility Commission of Texas

• ERCOT, NOGRR282, Large Computational Load Ride-Through Requirements, approved by the PUCT on July 9, 2026, in Project No. 54445, effective August 1, 2026. https://www.ercot.com/mktrules/issues/NOGRR282
• ERCOT, NPRR1308, defining Large Computational Load (same approval and effective dates). https://www.ercot.com/mktrules/issues/NPRR1308
• ERCOT, NOGRR289, Extension for LCL Cooling Load Ride-Through Compliance (checked October 17, 2026). https://www.ercot.com/mktrules/issues/NOGRR289
• PUCT, Order Adopting New 16 TAC §25.370, Project No. 58480, Item 58 (filed February 6, 2026). https://interchange.puc.texas.gov/search/documents/?controlNumber=58480&itemNumber=58
• Texas Register, adopted new 16 TAC §25.205, Net Metering Arrangements Involving a Large Load Customer Co-Located with an Existing Generation Resource, Project No. 58479 (April 10, 2026; effective April 15, 2026). https://www.sos.state.tx.us/texreg/archive/April102026/Adopted%20Rules/16.ECONOMIC%20REGULATION.html
• PUCT, Order Adopting New 16 TAC §25.194, Project No. 58481, Item 218 (filed September 18, 2026). https://interchange.puc.texas.gov/search/documents/?controlNumber=58481&itemNumber=218