What Data Center Developers Need to Know About NERC’s New Computational Load Standards

Three new Reliability Standards — CLO-001, CLO-002, and CLO-003 — head to industry ballot on August 19 and a new registration category for large data centers is expected to take effect in 2027. We are sharing what computational load developers, owners, and operators need to be focused on and why it is a smart move is to start building a compliance program now. 

For years, large electricity customers (not just data centers) have occupied a regulatory gray zone. They draw large amounts of power from the bulk power system (BPS) and thus have a material impact on grid reliability. Yet, the mandatory NERC Reliability Standards that govern generators and transmission owners were largely not written with them in mind. Why? Because why would we regulate the very entities for which the grid was designed for? That philosophy falls flat on its face when the largest assets on the grid become the end-use customers themselves. Hence, a focus turned first toward “large loads” but then further narrowed to “Computational Load Sites” above a certain size. Building on the July 2025 whitepaper on the characteristics and risks of emerging large loads and the Large Load Working Group’s gap assessment, NERC launched Project 2026-02 to establish foundational Reliability Standards for large computational loads (i.e., almost entirely focused on data centers (both AI and cloud services) and cryptocurrency mining). 

The Standard Drafting Team (SDT) met recently in Salt Lake City and have near-final Phase 1 drafts of three standards. They are planning for an initial 30-day formal comment period with a 10-day ballot beginning August 19, 2026, with NERC Board adoption targeted for December 2026. A parallel NERC Rules of Procedure (ROP) change is proposing to create two new registered entity categories: Computational Load Owner (CLO) and Computational Load Operator (CLOP). A new term will also be added in the ROP: Computational Load Site (CLS). Registration efforts are expected to begin/ramp in early 2027.  

If you develop, own, or operate data centers connected to the BPS (i.e., anything that is not truly buried down in the distribution system), you are likely to become a NERC registered entity with mandatory and enforceable standards placed on you, with ongoing auditable compliance obligations. The question isn’t whether you are ready — it’s how ready you’ll be. This is the top priority, by orders of magnitude, at both the FERC and NERC levels. So, there’s no sense in pretending that this will all blow over, at this point. 

What NERC Is Building 

According to NERC and the SDT, the Phase 1 approach is deliberately “foundational.” Rather than invent everything from scratch, the SDT is borrowing requirements language from existing standards (e.g., FAC-001, FAC-002, MOD-032, MOD-026, TOP-003, IRO-010, TOP-001, PRC-028, etc.) and making targeted requirements for the unique characteristics of computational loads. Technical specifics that are still evolving such as voltage and frequency ride-through (VRT/FRT) performance are intentionally deferred to Phase 2. However, it should be noted that these are likely some of the most critical aspects from a reliability perspective.  

The table below provides a high-level overview of the new CLO-001, CLO-002, and CLO-003 standards. 

Proposed NERC CLO Standards in Phase 1 

CLO-001	Interconnection, Studies & Modeling Data	Interconnection requirements, coordinated reliability studies, and planning modeling data (including model verification) for computational load sites.	New: Computational Load Site, CLS
CLO-002	Operational Data & Communications	Operational data specifications and sharing, Operating Instructions, and interpersonal communications with grid operators.	New: CLOP · Modified: Operating Instruction
CLO-003	Protection Coordination & Disturbance Monitoring	Protection coordination plus high-resolution disturbance monitoring (SER / FR / DDR) at the site.	None

Who This Applies To — The 50 MW and 100 kV Line 

Registration criteria needs a threshold. Under the current draft registration criteria, CLO and CLOP registration applies to a Computational Load Site of ≥ 50 MW total connected load, supplied through electrical equipment connected to the BPS at ≥ 100 kV, from one or more points of connection. A “Computational Load Site” is defined broadly as one or more buildings, structures, or installations at a single location that primarily contain IT infrastructure for software and services, AI training and delivery, crypto mining, or other data center computation. 

The SDT’s FAQ flags real-world cases that should be carefully reviewed and understood: whether the kV test applies at the high side of the utility transformers; whether multiple sites on shared source equipment aggregate; how site boundaries are drawn across “one or more buildings”; how Distribution Provider–fed configurations are treated; how the 100 kV threshold squares with FERC’s recent large load orders. If your site is in the gray area here, careful attention is needed to determine registration and compliance obligations.  

In addition to new requirements for data center owner/operators, the standards revisions also create new obligations for existing registered entities regardless of whether they are experiencing large load growth. The table below shows applicable entities and a summary of high-level obligations. 

Applicable Entities and Obligations 

Transmission Owner / Distribution Provider	Document CLO-site interconnection requirements; coordinate on studies; disturbance monitoring on main transformers they own.
Generator Owner (co-located)	Interconnection requirements within 45 days of a study agreement; cooperate on studies; disturbance monitoring.
Transmission Planner / Planning Coordinator	Publish a “qualified change” definition; jointly develop modeling data specs; perform interconnection studies.
Balancing Authority / Transmission Operator / Reliability Coordinator	Develop and distribute CL operational data specifications; issue Operating Instructions; establish interpersonal comms (TOP/BA).
Computational Load Owner (CLO)	Provide modeling data and model verification; disturbance monitoring; protection coordination; cooperate on studies.
Computational Load Operator (CLOP)	Satisfy operational data specs; comply with Operating Instructions; interpersonal comms, protocols & training.

It is reassuring to see the SDT focused on avoiding duplication for existing registered entities. For example, planning data is provided through MOD-032; TOs, DPs, and GOs were removed from CLO-002’s operational data submission because IRO-010 and TOP-003 already cover it; etc. The goal is to fill reliability gaps while avoiding duplicative requirements/obligations. 

Key Areas to Focus On 

To simplify this down, here are some of the most critical Phase 1 areas that will be required by Computational Load Owners and Operators.  

• Meet the interconnection requirements set by your TO, DP, and GO — these differ for each entity. 

• Meet TP and PC modeling and study requirements, including steady-state power-flow, short-circuit, and dynamic studies (which may include EMT analysis). 

• Establish processes to identify and manage Qualified Changes to Computational Load Sites.  

• Meet ongoing TP and PC modeling requirements for long-term planning studies, providing the models, data, and parameters needed to verify them — covering tripping, Ride-through, and disturbance response and recovery. 

• Develop model-verification processes that prove your submitted models match the actual equipment. 

• Meet RC, TOP, and BA data specifications for Operational Planning Analyses (OPAs), real-time monitoring, and Real-time Assessments (RTAs).  

• Establish processes to comply with Operating Instructions from TOPs, BAs, and RCs.  

• Establish interpersonal communications with each TOP and BA, including failure detection and backup.  

• Establish training programs covering NERC and Operating Instruction obligations. 

• Install disturbance-monitoring equipment to capture SER, FR, and DDR data. 

• Establish a process for developing new and revised protection-system settings (i.e., protection coordination).  

And keep an eye on more during Phase 2 efforts, which FERC has mandated. 

The Timeline 

Here is what NERC has publicly shared. Dates after the ballot depend on FERC approval. The standard becomes effective the first day of the first quarter after approval and then phased compliance windows are measured from the effective date. 

Standards Development Timeline 

Mar 18, 2026	Standard Authorization Request (SAR) approved; Project 2026-02 initiated.
Apr 1, 2026	SAR and ROP posted for comment.
May 20, 2026	Standards Committee approves formal standard development.
Jul 14–16, 2026	In-person DT meetings — near-final Phase 1 drafts of all three standards.
Aug 19, 2026	Initial formal comment period + 10-day ballot; ROP modifications posted in parallel (30-day comment).
Oct 2026	30-day final ballot; additional posting for industry comment.
Dec 2026	NERC Board of Trustees adoption.
2027	Expected FERC filing/approval; CLO/CLOP registration begins; Phase 2 commences.
Effective + phased	Compliance windows begin — see the phased schedule below.

Phased Compliance Windows (From Effective Date) 

CLO-001 — Qualified-change definition & modeling data specs	TP, PC	+3 months
CLO-001 — Interconnection requirements	TO, DP, GO	+6 months
CLO-001 — Study coordination & modeling data / verification	CLO (+ TP, PC, TO, DP, GO)	+9 months
CLO-002 — Operational data specifications	RC, BA, TOP	+6 months
CLO-002 — Data provision, Operating Instructions & interpersonal comms	CLO, CLOP (+ TOP, BA)	+12 months
CLO-003 — Protection coordination	CLO	+9 months
CLO-003 — Disturbance monitoring build-out	CLO	+36 months

* Review Implementation Plans for each standard accordingly. These figures reflect the latest known information and may change prior to, during, or after comment periods and ballots. 

Lessons from the IBR Playbook — Don’t Wait to Be Found 

None of this is unprecedented. NERC has run a similar playbook for inverter-based resources (IBRs) registration and standards development after FERC Order No. 901 and related directives. Rules of Procedure changes by NERC establish the “who” and then the NERC Standards development efforts define the “what”. In many cases, the utility and its technical facility interconnection requirements will remain the deciding factor for “how” specific details get implemented.  

Some important insights and perspectives worth sharing: 

• Large computational loads will very likely be registered whether you engage or not. IBR owners who assumed they were out of scope were identified and registered anyway. Don’t find yourself in a last-minute scramble to build up all the necessary capabilities.  

• The compliance obligations are far more extensive than the headline risks. Complying with utility interconnection requirements is a massive lift. Ensuring ride-through performance requires a thorough engineering evaluation. Establishing verified models requires specific expertise. Disturbance monitoring and protection coordination often require changes to substation equipment. The CLO standards as a whole will be a significant lift, considering data centers are starting from a clean slate essentially.  

• Early engagement shapes rules and shortens runway. Engage in comment periods for the registration and standards comment periods. If you are not sure how to engage, reach out to experts like us who can help.  

The parallel is close enough to be a gift: you can see the road ahead and start walking it now. 

Building Your Compliance Program — Start Now 

You don’t need the final standards to begin this journey. Here’s where energy should be focused over the next few months. 

1. Map your footprint. Inventory every site at or approaching ≥ 50 MW and ≥ 100 kV; work through the FAQ cases;¹ establish applicable sites that must register and technical justifications for sites that are not.  

2. Understand CLO vs. CLOP. Ownership and operation functions are being mapped to different entities, so make sure you understand who is responsible for these tasks and obligations across each site.  

3. Engage in the standards development and registration efforts. Comment on the draft standards as they come out. Provide constructive and technical details that justify the claims made. Bring real-world evidence to the table. Consider participating through the Short-Term Advisory Group and tracking the Large Load Working Group. 

4. Run a gap assessment against the draft requirements. Treat CLO-001 / -002 / -003 as your working checklist today and determine where immediate gaps are. This can be a high-level evaluation of standard practices, systems, networks, tools, equipment, data, etc. This is the starting point for more technical compliance work down the road, and a critical first step in that regard. 

5. Prioritize modeling and site information. Gather, retain, and check steady-state, dynamics, and short-circuit models. Establish verification processes. Engage with third parties and subject matter experts, as needed. Consider models along with site details like protective relay settings, single line diagrams, controls narratives, etc. Build robust systems and tools to consolidate all this information.  

6. Understand disturbance monitoring obligations and procurement needs. SER / FR / DDR equipment, outage windows, and vendor capacity can be a constraint. Start early on these evaluations so gaps can be filled and cost-effective solutions can be deployed. Leverage qualified professionals to help navigate these requirements effectively without spending extra money where it may not be needed. 

7. Build communications capability. Plan for interpersonal communications, protocols, and operator training with your TOP and BA. 

8. Stand up a compliance program and governance structure. Establish evidence retention, internal controls, compliance procedures, named compliance leaders and owner, subject matter experts. Engage with highly qualified shops that can combine the compliance aspects with the engineering aspects — otherwise you are setting yourself up for significant risk down the road (as the IBR space has proven).  

How Elevate Can Help 

Elevate is positioned to help data center developers, owners, and operators navigate these new NERC registration and standards obligations. Our senior leaders helped lead NERC strategic initiatives before starting Elevate, are currently on the NERC Reliability and Security Technical Committee (RSTC), are closely tracking all NERC and Regional Entity efforts, and have strong technical engineering experience and expertise in addressing all the technical aspects of these new standards. We are prepared to help developers, owners, and operators translate NERC and transmission provider requirements into practical implementation and help develop a strong compliance program and posture. If you’re anywhere on this journey, our experts are here to help.  

This post is based on available materials from NERC as of mid-July 2026. Draft requirements and dates are subject to change through the comment and ballot process. This is general information, not legal or compliance advice.