Buying a power generation facility requires a current view of its operating rights as well as its equipment. A plant’s existing interconnection, air permit or service agreement may not authorize the buyer’s planned operating profile, expansion or new data-center load.
The federal picture changed materially in September 2026. EPA finalized a partial repeal of the 2024 power-plant carbon standards, with an effective date in November, while separately proposing to remove remaining greenhouse-gas requirements. Meanwhile, FERC’s work on large loads builds on regional actions already taken, including its December 2025 PJM co-location order.
This guide separates those actions and explains what to include in acquisition and equipment diligence. Regulatory status was checked on September 24, 2026. Treat the dates below as a dated snapshot and recheck applicable orders, rules and permits before committing to a transaction.
Key Takeaways
- EPA’s September 2026 carbon-rule action is a final partial repeal with a future effective date; the broader repeal remains a separate proposal.
- The PJM co-location proceeding has produced an order. Buyers still need the applicable tariff and project-specific agreements.
- Generator interconnection, electric-load service and co-location are related but distinct approval questions.
- A change to a federal emissions rule does not independently amend a facility’s permit or eliminate other environmental obligations.
- Review the intended operating case, transferable rights and required modifications before assigning value to existing infrastructure.
What changed, and what remains project-specific?#
Federal actions and what buyers should examine
| Action | Verified milestone | What buyers should examine |
|---|---|---|
| EPA partial repeal of power-plant carbon standards | Published September 17, 2026; effective November 16, 2026 | Which provisions apply to the unit, when the change becomes effective and whether permits need revision |
| EPA proposal addressing remaining power-plant GHG standards | Supplemental proposal announced alongside the September final action | Distinguish a proposed change from an effective requirement |
| EPA repeal of 2024 MATS amendments | Finalized February 19, 2026 | Applicable mercury and air-toxics requirements for the specific coal- or oil-fired unit |
| FERC PJM co-location order | Issued December 18, 2025, in EL25-49 | Current tariff provisions, service arrangements and costs for the proposed co-located load |
| FERC regional large-load actions | Show-cause orders issued June 18, 2026, to six regional grid operators | Subsequent filings and orders affecting the relevant region |
| FERC computational-load reliability directive | July 16, 2026 directive; NERC submissions due December 31, 2026 | Proposed standards, registration criteria and eventual implementation requirements |
These actions do not form a single approval process. A buyer should track each applicable requirement against the facility’s technology, location, grid relationship and proposed operating mode.
EPA’s carbon-rule change has a defined scope and effective date#
The September final rule repeals specified provisions, including emission guidelines for existing fossil-fuel steam generating units, carbon-capture-based standards for large modifications at coal-fired units and carbon-capture-based standards for new baseload combustion turbines. Its November 16, 2026 effective date is distinct from its September publication date.
The accompanying proposal addresses remaining greenhouse-gas standards. It should not be described as already effective, nor should the final partial repeal be summarized as the removal of every power-plant emissions requirement.
For a buyer, the useful next step is a unit-by-unit applicability review. Ask the environmental team to identify the relevant rule provisions, construction and modification history, permit conditions and operating restrictions. For a transaction expected to close after the effective date, identify which assumptions depend on that timing and how a subsequent legal or regulatory change would be handled.
Keep the underwriting model explicit. If a future rule change is assumed to reduce capital or operating expenditure, show it as a separate scenario until the project team has established how it affects the actual facility. A national announcement does not by itself establish the savings available at a particular site.
MATS changes are separate from carbon standards#
EPA’s February action repealed specified 2024 amendments to the Mercury and Air Toxics Standards, commonly called MATS. The agency’s summary identifies changes involving particulate-matter limits, the mercury standard for lignite-fired units and particulate-matter continuous monitoring requirements. It was not a repeal of the entire MATS framework.
For an existing thermal facility, keep the greenhouse-gas and hazardous-air-pollutant reviews separate. Request the latest permit, compliance reports, testing records and any pending permit applications. Identify the remaining equipment and operating obligations rather than assuming that an announced rollback makes controls unnecessary.
Site diligence should also account for water, waste, fuel storage and legacy conditions where relevant. Ask the environmental team to map those obligations to the specific property and transaction. An attractive turbine or interconnection position does not resolve liabilities elsewhere on the site.
Generator interconnection is different from serving a new load#
FERC Order No. 2023 and Order No. 2023-A reform generator interconnection procedures and agreements. They should not be presented as the universal application process for a data center seeking utility service.
Start with the physical and commercial arrangement:
Proposed arrangements and questions to resolve
| Proposed arrangement | Questions to resolve |
|---|---|
| Generation exporting to the grid | What interconnection service and operating limits apply, and does the proposed change require further study? |
| A data center supplied by a utility | Which utility and regional processes govern load service, upgrades, contracts and energization? |
| Load co-located with an existing generator | How are grid withdrawals, generator outages, transmission service and costs addressed? |
| On-site generation operating in parallel with the utility | What synchronization, protection, import/export and metering conditions apply? |
| An electrically isolated generation-and-load system | What approvals and operating obligations remain even without routine grid parallel operation? |
For an acquisition, request executed agreements and their amendments. Review assignment, change-of-control, operating limits and modification provisions with the relevant counterparties. Existing wires and transformers are evidence of infrastructure; the governing agreements establish the rights associated with it.
Likewise, a generator queue statistic should not be converted into a predicted wait for a new data-center load. Use project-specific studies and the service provider’s documented process to build the schedule.
PJM co-location already has a federal order#
FERC’s December 18, 2025 order directed PJM to develop clearer tariff rules for co-located load and addressed transmission-service options. The accompanying fact sheet also describes further proceedings on rates and conditions. It is therefore inaccurate to say the proceeding has produced no order, or to assume that the order settles every commercial detail for a new project.
A buyer considering a plant-plus-data-center arrangement should request a single-line diagram and operating cases that show the relationship between the plant, campus and transmission system. Include normal operation, generator outage, campus load reduction and any period when grid imports replace on-site generation.
Then obtain written answers to three commercial questions:
- Which service arrangement applies to each operating case?
- Which charges, upgrade costs and capacity obligations follow from that arrangement?
- Which conditions must be satisfied before the proposed load can operate?
PJM-specific provisions should not be applied automatically in another region. Even within a region, a nearby facility’s approved arrangement is not evidence that a new transaction receives the same treatment.
Follow the regional large-load proceedings through implementation#
In June 2026, FERC directed PJM, MISO, SPP, CAISO, ISO New England and NYISO, together with relevant transmission owners, to justify or revise large-load tariff treatment. The orders addressed issues including study processes, cost allocation, co-location and flexible service.
The original response period is now historical. For a current transaction, review later filings and orders and identify the tariff provisions actually applicable to the project. A response filing is not automatically an approved tariff, and a reform proposal is not a guaranteed energization date.
Create a short evidence register: relevant docket, latest applicable order, effective tariff sheets, executed project agreements, unresolved issue and responsible adviser. This keeps the acquisition model tied to operative documents instead of an older news summary.
Where commercial agreements are near completion, review their actual transitional or grandfathering treatment. Do not infer protection from general statements about preserving existing deals.
NERC’s December milestone is a filing deadline#
FERC’s July directive requires NERC to submit new or modified computational-load reliability standards and related Rules of Procedure revisions, including registry criteria, by December 31, 2026. That date is a submission deadline, not an automatic start date for every data center to comply with new standards or register.
For planning purposes, ask the design team to preserve the information likely to support a reliability review: load characteristics, protection logic, disturbance response, control settings and available monitoring. Track the actual adopted criteria and implementation timetable before assigning mandatory obligations to a particular facility.
This is especially relevant when the seller’s operating model differs from the buyer’s proposed use. Converting a generation asset into a campus power source may introduce new interactions between plant controls and a large electronic load that should be studied during design.
Equipment readiness and operating permission need separate evidence#
A used generator or turbine can be inspected, purchased and shipped while the broader project still has unresolved fuel, grid or permitting work. Track these as separate workstreams.
For gas turbines, document the exact model and configuration, net output at site conditions, fuel requirements, operating history, maintenance status and included auxiliaries. For reciprocating generators, also confirm the applicable operating rating and the engine’s emissions classification.
EPA’s data-center air-quality resources provide a starting point for distinguishing stationary-engine and turbine requirements and the role of state and local permitting. Calling equipment “temporary” or “bridge power” does not establish an exemption.
Review the switchgear, transformers and controls against the proposed one-line diagram. Confirm that the supplied package can support the intended voltage, frequency, fault-duty and operating sequence. A plant’s historic output is not sufficient evidence of its performance after relocation or reconfiguration.
A purchase decision framework#
Use the following review gates before treating an asset as ready for the intended project:
- Operating case defined: load, annual operating profile, fuel and grid relationship agreed.
- Rights documented: site access, equipment ownership, relevant agreements and transfer conditions reviewed.
- Environmental position established: applicable requirements, permit changes and site obligations identified.
- Technical condition verified: inspection, records, performance evidence and modification scope assessed.
- Project scope priced: equipment, transport, civil work, fuel connection, electrical integration and commissioning included.
- Schedule supported: critical approvals, counterparty commitments and construction milestones assigned owners.
Record unresolved items as specific dependencies, with a cost or schedule consequence where it can be estimated. This creates a more useful investment decision than labeling an entire project “permitted” or “grid connected” without qualification.
For related equipment diligence, see SecondWatt’s used-generator buyer checklist and mobile gas-turbine bridge-power guide. To discuss sourcing, contact SecondWatt with the operating requirements and the approvals already established.
Frequently asked questions#
Has EPA repealed all power-plant carbon standards?#
The September 2026 action is a partial repeal with a November effective date. EPA separately proposed action on remaining requirements. Check the applicable provisions and current status for the unit being evaluated.
Does a federal rule change automatically revise an air permit?#
Do not assume that it does. Have the permitting team identify continuing permit conditions and whether a permit revision or other action is required.
Does FERC Order No. 2023 govern every data-center connection?#
No. It addresses generator interconnection. A data-center project must identify its applicable load-service, transmission and any generation-related processes.
Can a buyer assume an existing plant’s interconnection rights transfer?#
Review the governing agreements and transaction requirements. Physical infrastructure alone does not establish assignment rights or permission for a changed operating arrangement.
Is on-site generation a way to avoid all grid-related requirements?#
The requirements depend on how the system connects and operates. Parallel operation, grid imports and co-location can raise different issues from an electrically isolated system.
Must every data center register with NERC by December 31, 2026?#
No. The cited directive sets a deadline for NERC’s submissions. Any resulting registration and compliance obligations depend on the adopted criteria and implementation process.