Sarah: For four days, this was county zoning fights.
Sarah: Today, FERC is naming data centers in a reliability directive.
Sarah: That escalation deserves a timeline.
Matt: This is The Data Center Daily — the day somebody finally got named.
Matt: FERC pointed at NERC, Virginia pointed at a bill, and Texas has $2.2 billion in abatements up for a look.
Sarah: Start with the federal move — because for once, it has a mechanism worth stress-testing.
Matt: One tap on follow, and we'll be back in your ears before you know it.
Sarah: Bruce Grabow, Shane P.
Sarah: Early, writing in Energy Law Blog:
Quote: On July 16 2026
Quote: the Federal Energy Regulatory Commission (“FERC”) issued an order that directs the North American Electric Reliability Corporation (“NERC”)
Quote: to take action regarding “computational loads,” which are loads comprised of power demand from information technology equipment
Quote: such as servers storage
Quote: and networking hardware
Quote: e.g. data centers. The FERC explained that
Quote: in light of the unprecedented load growth driven by data centers
Quote: it is imperative that NERC address the reliability concerns associated with computational loads.
Sarah: On July 16 FERC issued an order directing NERC to file reliability standards for what it's calling 'computational loads' — servers
Sarah: storage networking. It's the first time the federal reliability framework has named data centers as their own class of grid demand.
Matt: So the accountability gap I've been hammering all week — FERC just handed it to an actual institution: NERC.
Matt: That's your answer to 'who's on the hook.'
Sarah: Careful. It tells NERC to file standards; it doesn't write them.
Sarah: And this grew straight out of NERC's own comments on the large-load ANOPR
Sarah: Docket RM26-4 — where NERC itself said demand growth is the highest in two decades.
Matt: Right, and here's my worry — NERC filings move like continental drift.
Matt: Is there any timeline with teeth?
Matt: Or does the ratepayer bill keep running while everybody drafts language for eighteen months?
Sarah: The order says 'urgent need for action.'
Sarah: Whether 'urgent' survives NERC's standard-setting process is what to watch.
Sarah: These are reliability rules, remember — not queue reform.
Sarah: Interconnection backlog is a separate fight.
Matt: Which is exactly my question — is this pointed at the twelve gigs of large load stuck in PJM's queue
Matt: or is it just a paperwork registration exercise that never touches the LOA-to-megawatt gap?
Sarah: The action plan calls for registration analysis of large loads.
Sarah: That's a step. How big a step depends entirely on what NERC files and when FERC accepts it.
Matt: Four days.
Matt: Monday we're on county zoning fights and moratoriums, and by Thursday the feds are naming data centers in a reliability directive.
Matt: Every hyperscaler sitting on a letter of intent is now staring at a compliance ceiling they didn't price at announcement.
Sarah: Here's what Adam Aton at E&E News is reporting.
Matt: Virginia. The data center capital of Earth.
Matt: And now the state is actually asking whether the guys pulling the megawatts should pay for the wires.
Matt: Revolutionary concept.
Sarah: The mechanism matters more than the mood, Matt.
Sarah: It's the same accounting the PJM market monitor was gesturing at when he put $6.3 billion of the $16.4 billion capacity bill on data center
Sarah: load. Now a state wants to formalize it.
Matt: Right, but 'mulls' matters here.
Matt: Is there a docket number, or is this a working group that dies in committee while the ratepayer bill keeps running?
Matt: Those are very different animals.
Sarah: Right — the E&E piece says 'mulling,' not a filed tariff.
Sarah: But pair it with the FERC-NERC order we just hit: federal reliability standards naming this load class
Sarah: and a state looking at putting the grid cost on that same load.
Sarah: Four days ago this beat was county zoning fights.
Matt: That's the part that gets me.
Matt: Monday it's a Nebraska county drawing a line administratively.
Matt: Thursday it's FERC and a state cost-allocation fight.
Matt: The escalation curve is real.
Sarah: And it changes the math for anyone who priced their PPA at announcement.
Sarah: A direct cost shift is a line item they didn't model.
Sarah: Rod Walton at Energy Tech is tracking this.
Sarah: PJM's forward capacity auction gives you the supply-side read on everything we just covered.
Sarah: The FERC-NERC piece is about who writes the rules; this is the price tag when the megawatts don't show up on schedule.
Matt: And here's the number that stuck with me — Monitoring Analytics pinning roughly $6.3 billion of the last auction on data center load
Matt: nearly thirty billion across four straight auctions.
Matt: That bill's already been run up.
Sarah: Walton frames it at Energy Tech as electrification load colliding with a supply gap that's already priced in.
Sarah: The auction clears high because the capacity isn't there — not because someone's gouging.
Matt: Right, but stack this against the 12 gigawatts of large load sitting in the PJM queue as of May.
Matt: If the FERC directive doesn't specifically bite on that backlog
Matt: we're just clearing scarcity at a higher price every auction and calling it a market.
Sarah: Here's Amanda Cutshall at Community Impact:
Quote: Pacifico Cedar Creek LLC filed a June 24 application with the Texas Comptroller for a project at 382 Earl Callahan Road
Quote: Cedar Creek that would pair an unnamed data center tenant with a multibillion-dollar natural gas-fired power facility.
Matt: Bastrop ISD sits down June 24 to consider a ten-year JETI abatement for Pacifico — capping the property value on school taxes from 2029
Matt: through 2038. Same nine-o'clock-session dynamic we saw out of Grimes County, except this one's $2.2 billion.
Sarah: And it's paired — data center plus a natural gas facility on 2,842 acres.
Sarah: That's nearly twice EdgeConneX's three planned Cedar Creek campuses combined, on one deed.
Matt: The tenant's unnamed.
Matt: So Bastrop schools are being asked to cap their tax base for a decade for a customer nobody's identified yet.
Sarah: Application filed, in-service targeted for 2028.
Sarah: Filing is one step; approval is another — this is a JETI application under review, not a signed agreement.
Sarah: The Comptroller hasn't blessed it.
Matt: Here's the split-screen: Virginia's over here weighing a grid-cost shift onto data centers
Matt: and Bastrop's over here writing one a ten-year tax break.
Matt: Somebody's doing subtraction while somebody else does addition.
Sarah: This one's from CRE Daily:
Quote: Several major US data-center operators are shopping majority stakes in their companies as AI-driven usage drives valuations to new highs
Quote: The Wall Street Journal reports.
Quote: Firms including Netrality Data Centers
Quote: DataBank Edged and EdgeCore Digital Infrastructure have engaged bankers to solicit offers this summer.
Matt: So Netrality and DataBank are shopping majority stakes this summer — Edged and EdgeCore too — and the whole pitch is secured power and
Matt: existing customers. Funny timing.
Matt: We just spent this whole episode on Virginia pricing a cost shift onto data centers and FERC telling NERC to write standards that name this
Matt: load class. And now private equity's being told: buy now, tens of billions, control the pipeline.
Sarah: The value driver is right there in the WSJ read — vacancy under one percent
Sarah: and the assets that clear are the ones already holding a grid connection.
Sarah: The square footage is secondary; the energized interconnect is the prize.
Matt: Right — and that's the tell.
Matt: The scarcity making these platforms worth a fortune is the same scarcity Virginia and PJM are about to start billing for.
Matt: So is the majority-stake sale the exit before the cost shift lands on the operator's books?
Sarah: It reprices scarcity the way Carlyle repriced Copia — the connection is the moat.
Sarah: But a moat you got by being early doesn't help much when the regulator changes the toll.
Host: Got a tip, a correction, or a story we should be watching in the data center world?
Host: Send it our way at datacenterdaily at lantern podcasts dot com.
Host: We'd love to hear from you.
Host: What we're watching next: if the Texas Comptroller determines Pacifico Cedar Creek's JETI application is complete
Host: the agency has 60 days to recommend or decline the proposed tax agreement.
Host: We've put links to every story from today's briefing in the show notes, so you can dig into the ones you want to read more closely.
Host: That's The Data Center Daily for today.
Host: This is a Lantern Podcast.