PJM Interconnection on Oct. 13, 2026, filed an executed study agreement with the Federal Energy Regulatory Commission under Docket ER27-126. The agreement covers the Flagship Project, a proposed AI data center, generation and transmission development centered at and around the U.S. Department of Energy's former Portsmouth Gaseous Diffusion Plant in Pike County, Ohio. The filing, designated FERC Rate Schedule No. 54, is titled a "Study Agreement in Furtherance of the State of Ohio's State Agreement Approach Request." PJM said the Ohio Federal Energy Advocate invoked the State Agreement Approach (SAA) on the state's behalf in a June 15, 2026, request.

The agreement has five parties: PJM; AEP Ohio Transmission Company; and three SB Energy affiliates, SE DC DevCo, PORTS 2 Interconnect and Portsmouth Gas DevCo. PJM asked FERC to make the agreement effective Sept. 25, 2026, the date it was executed. It named Oct. 14, 2026, as an alternative effective date.

What the study covers

PJM's transmittal letter says the Flagship Project's initial 800-MW phase is served under Ohio Power's Data Center Tariff. The expansion under study is larger: according to the filing, it comprises approximately 9,570 MW of additional data center load and 10,170 MW of gross new generating capacity, with phased completion through 2032, supported by three proposed 765-kV transmission lines and related infrastructure. Some of the gas-fired generation would sit at the Portsmouth plant site and some at a separate site about 30 miles away, the filing says.

The study agreement sets up a separate path for evaluating the project. PJM said it will study the load, generation and transmission together rather than each component in isolation, and that the generation will not go through its interconnection queue but will remain subject to the same substantive reliability standards and planning criteria. PJM wrote that the agreement "establishes a different study process, but not different substantive reliability standards." Utility Dive reported on Oct. 14 that PJM will assess whether the transmission facilities AEP Ohio has identified are sufficient and whether more infrastructure is needed.

PJM also set limits on what the study does. "The studies will provide the technical basis for Ohio to determine whether to proceed," PJM wrote in the filing, adding that the studies will not themselves select transmission projects or designated entities, establish cost allocations, or grant the project transmission service or interconnection rights. FERC acceptance of the agreement would not constitute approval of any transmission project, PJM said.

Under the agreement, SE DC DevCo is responsible for all of PJM's study costs. The filing says the developer must pay a $500,000 study deposit upon execution and another $500,000 if it submits new specifications for a revised study, and that the deposits are not a cap on its cost responsibility.

Who pays

Under the State Agreement Approach, the costs of any transmission projects a state sponsors are recovered from customers in that state, according to PJM's filing. Utility Dive reported that PJM intends to work with Ohio and other parties to develop a cost allocation methodology for any "state agreement public policy projects" that the Public Utilities Commission of Ohio (PUCO) decides to sponsor. The specific cost allocation and recovery mechanisms remain subject to PUCO and FERC proceedings, PJM said.

PJM's filing states that SB Energy has committed to developing the Flagship Project consistent with the White House's Ratepayer Protection Pledge. According to the filing, SB Energy's commitments include bringing new generation, paying for required power delivery infrastructure and network upgrades, infrastructure payment obligations that apply regardless of actual electricity usage, and making excess generation and transmission capacity available to the grid. The filing also says SB Energy has committed $40 million to community benefits, supplemented by a $40 million commitment from OpenAI, which it identifies as the data center tenant.

The federal partnership behind the site

The Departments of Energy and Commerce announced the partnership on March 20, 2026. It involves SoftBank and AEP Ohio and covers a new 10-GW data center development plus redevelopment of DOE land at the Portsmouth Site. According to DOE's announcement, SB Energy plans 10 GW of new generation, including 9.2 GW of natural gas backed by $33.3 billion in Japanese funding previously announced as part of the U.S.-Japan Strategic Trade and Investment Agreement. DOE said SB Energy is also investing $4.2 billion with AEP Ohio to upgrade and build transmission lines in southern Ohio, in compliance with the Ratepayer Protection Pledge. The announcement included statements from Energy Secretary Chris Wright, Commerce Secretary Howard Lutnick, AEP CEO Bill Fehrman and SoftBank CEO Masayoshi Son.

Utility Dive reported that the White House first announced Flagship in mid-February as part of a $550 billion trade deal with Japan. PJM described the study agreement as a way to evaluate Ohio's request while it continues developing a more formalized process for studying large load and associated generation together, an approach the filing says FERC has encouraged grid operators to pursue.

What Happens Next

  • FERC action on Docket ER27-126: PJM asked the commission to accept the agreement effective Sept. 25, 2026, or alternatively Oct. 14, 2026. No date for a commission order has been set in the record.
  • PJM studies: Once the agreement is in effect, PJM will carry out the technical studies, which Ohio will use to decide whether to enter into an SAA agreement and sponsor any transmission facilities.
  • Ohio approvals: According to the state's request as quoted in PJM's filing, any SAA agreement filed at FERC must be authorized by PUCO in conjunction with the resolution of state-jurisdictional issues.
  • Construction: DOE's March announcement said construction was expected to begin in 2026.

Sources