Third time this year the DOE has told hyperscalers to fire up the diesel and keep PJM's lights on. At what point does emergency just become the plan? If you're just joining, the federal large-load interconnection fight is about who gets to set the ground rules when data-center-scale demand plugs into the grid. FERC and DOE have been testing the line between standardized regional procedures and state authority, and FERC's already put six regional operators on a 60-day clock: change your tariffs, or explain why the rules you've got are good enough. This is the Data Center Daily. Today — a state commission finally asks whether it needs rules, a REIT that owns Walgreens is buying into hyperscale, and Kline Township residents sat through six hours of AWS and still can't get a water number. Let's go. If you want to keep up with Federal data center cost allocation fight, tap follow so the next episode lands in your feed. This one's from TFTC:
Energy Secretary Chris Wright issued two emergency orders on June 30, 2026, directing PJM Interconnection to deploy backup generation resources at AI data centers and other large commercial loads through 11:59 PM EDT July 3, per the DOE press release. PJM is forecasting a potential new all-time peak load of 166,304 MW on Thursday July 3, covering 13 states and Washington D.C., a grid serving more than 67 million people.
Third time in 2026. Third. Chris Wright signs two more 202(c) orders June 30, PJM's dispatching diesel at the data centers through July 3rd. At what point do we stop calling it an emergency and just call it the plan? And here's the number that makes it hit — PJM's projecting a 166,304 MW peak July 3rd. That squeaks past a record set in 2006, back when the AI data center didn't exist in the footprint at all. Right, so the new load shows up, and the fix is bolting diesel gensets to a hyperscaler campus and letting the feds flip the switch. Nobody priced that into the capacity market. Exactly. PJM's capacity auction was never built to value that kind of reliability backstop. Applications came in June 27th and 29th, orders went out the 30th. The framework's improvising in real time. Three orders in six months creates a precedent. The government just established it can commandeer private generation any time reserves get tight — and somebody eats that fuel bill. That's the escalation to sit with as the week closes. The capital markets priced these assets as smooth infrastructure; the grid operator lived three emergency orders. Same assets, two very different stories. This one's from PA Environment Digest Blog:
The Public Utility Commission published notice in the July 4 PA Bulletin inviting comments on the possibility of promulgating regulations for interconnecting electric loads, including large loads. Specifically, the Commission seeks comments on this list of questions and any other topics that interested parties believe should be included in potential regulations on the interconnection of electric loads.
So Harrisburg finally puts a rulemaking docket on paper for large loads. Question one: what interconnection issues should we address? Buddy, everything. That's the answer. Everything. The notice hits the July 4 Bulletin. Same week we just heard DOE pull the diesel lever for the third time this year. The commission's asking whether it needs rules while the grid's already improvising them. And look at question three — different review levels by load size, modeled on generation interconnection. They're admitting a 500-megawatt data center should get screened like a power plant, which is exactly what every county's been screaming about for a year. Question four's the one I'd circle — expedited process when generation's collocated with the load. That's the on-site gas turbine, the backup diesel, getting a fast lane. Read it next to a 202(c) order and it stops being hypothetical. Here's Troutman Pepper:
On June 18, 2026, FERC accepted in part and rejected in part requests for rehearing of its December 18, 2025, order (December Order) directing PJM Interconnection, L.L.C. (PJM) to revise its Open Access Transmission Tariff (Tariff) to clarify and establish certain rates, terms, and conditions of service applicable to Interconnection Customers in PJM seeking to serve Co-Located Load (June Order).
Update on the federal large-load interconnection fight: on June 18, FERC accepted in part and rejected in part the rehearing requests on its December order telling PJM to rewrite the tariff for co-located load. This is the paperwork version of the diesel story we just hit. FERC opened this docket back in February 2025 because PJM's tariff had no clear rates for a data center sitting behind the meter on a generator. Right, so the December order started defining co-located load, and now — six months later — we're still adjudicating whose rates apply. Meanwhile DOE's out there commandeering the actual generators three times this year. The rulebook's getting written on rehearing while the grid's already improvising with emergency orders. Harrisburg's just now asking whether it needs rules at all, and FERC's litigating the ones it wrote in December. Three new transmission services for co-located load, accepted in part. If you want to know what the grid operator thinks a data center behind a generator actually is, it's finally in the tariff language — partially. From Kent Jackson at Standard Speaker:
“We did get a lot of ‘I’m not sure,’” Daniel Leshko said during the hearing when he raised questions about the supply and cost of electricity and whether homeowners in the village of Haddock where he lives will be required to connect at their cost to a sewer line that Amazon would install for the data center.
Six hours, two nights, in a school gymnasium, and the residents walk out with — quote — 'a lot of I'm not sure.' On power cost. On water. On whether their own homes have to pay to connect to Amazon's sewer line. This is the third jurisdiction this week running the same playbook. AWS shows up, runs the clock, and the transmission and water numbers still aren't on the table when everyone goes home. 380 acres off Lofty Road, and the questions on the record are blasting, mine subsidence, backup generators. A zoning meeting shouldn't sound like the due-diligence checklist the applicant was supposed to bring. And here's the whiplash — same week the PA PUC opens a comment docket asking whether it should even have interconnection rules for large loads. Kline Township's living the answer while Harrisburg's still drafting the question. Right. The planners don't even have to decide yet. So the guy asking about home-shaking vibrations gets 'I'm not sure' and a follow-up date. Great process. Bisnow, with Emily Wishingrad:
Out of the gate, the venture is poised to acquire three assets in Northern Virginia's Data Center Alley valued at over $6B. The first acquisition is expected to close in the third quarter of the year. That data center is fully leased. The venture expects to acquire the two other assets, which are still under development, once they are completed.
Realty Income — the net-lease REIT that owns your local Walgreens and Winn-Dixie — is putting a billion-four into hyperscale data centers. Forty-five percent stake, $700 million funding this quarter. Three assets in Data Center Alley, valued north of $6 billion. One's fully leased and closing in Q3; the other two are still under development. Note the phrasing — stabilized, investment-grade tenants, triple-net. That's a bond wearing a data center's clothes. So the same vehicle that owns strip-mall drugstores now wants a slice of Loudoun County power draw. That tells you the trade is getting crowded — institutional money chasing already-energized capacity. And it rhymes with the Blackstone-DLR structure — hyperscalers offloading the real estate to whoever wants the yield. But here's my question after the DOE piece we just hit: when the emergency orders keep coming and somebody has to eat the backup diesel bill, is that in the triple-net lease? Or does the REIT find out later? They start stateside and plan to expand into Europe. Another data point on whether this offload-to-institutional-capital model is turning into a template or staying a one-off. Template. When Walgreens' landlord is in the game, the era of hyperscalers owning their own buildings is over. If you track data centers, you're probably tracking AI demand too. Try AI Daily Briefing: top AI news for engineers, founders, and investors, every weekday, breaking down real capabilities versus demo hype fast. Find it wherever you listen to podcasts.
What we're watching next: PJM's forecast all-time peak load test lands today, with DOE backup-generation orders running through 11:59 PM Eastern. Amazon has 30 days to answer technical questions from Kline Township's engineers and consultants. And the Realty Income, Cloud Capital, and institutional-investor venture expects its first Northern Virginia acquisition to close in the third quarter.
Links to every story we covered are in the show notes, so take a look if one deserves a deeper read. That's The Data Center Daily for today. This is a Lantern Podcast.