Sarah: For weeks, this was a queue-math argument on paper.
Sarah: On July 22, it turned into a voltage disturbance that ran from D.C.
Sarah: to Chicago. Quick catch-up before we dig in: PJM's fight over large loads was already playing out on several fronts — capacity-market costs
Sarah: backstop design governance
Sarah: federal oversight. Its market monitor attributed 6.3 billion dollars, or 38 percent of the latest auction charges, to data centers.
Sarah: And FERC has warned it could impose reforms if PJM doesn't act by September.
Matt: This is The Data Center Daily — today
Matt: a grid that finally flinched
Matt: a governor putting his name on the answer to who pays
Matt: and a no-water pledge that just became a court exhibit.
Matt: Sarah, start with that disconnect.
Matt: We'll keep tracking PJM large-load integration plan — follow the show so the next update finds you.
Sarah: From Financial Post:
Quote: Call it a new normal for the US power system: Seasonal weather extremes overlap with the growing electricity needs of factories and the
Quote: artificial intelligence sector.
Quote: As households crank up air conditioners to cope with temperatures topping 100F (38C)
Quote: power reserves shrink and decades-old transmission equipment is stressed.
Sarah: Bloomberg's frame today sets up everything else on the grid this week: back-to-back heat waves
Sarah: air conditioners maxed out
Sarah: and RTOs built for an era of flat demand now managing power for 150 million people.
Matt: Right, and that's the part I keep coming back to — these RTOs were designed during what Bloomberg literally calls somnolent demand growth.
Matt: Now it's 100 degrees, and AI load runs around the clock.
Matt: The machine was built for a nap, and we're asking it to sprint.
Sarah: The line that lands is “decades-old transmission equipment under stress.” We're talking about steel in the field
Sarah: running hot not a forecast or a queue number.
Matt: And notice who's sharing the wire.
Matt: Households cranking the AC and hyperscalers running flat-out on the same aging network.
Matt: When reserves shrink, somebody's load gets managed — and I'd bet it isn't the data hall.
Sarah: The honest caveat: Bloomberg's not naming a specific failure here.
Sarah: It's laying out the conditions.
Sarah: The specific events are where this gets physical, and we'll get to those.
Sarah: Here's Tim McLaughlin at Reuters:
Quote: The epicenter of the event was in northern Virginia, home to the largest collection of data centers in the world.
Quote: When an area transmission line went out of service Wednesday morning
Quote: the data centers' own control systems unplugged from the electric grid and transferred to backup power
Quote: Dominion Energy the electric utility for the region
Quote: said in a statement.
Matt: This is the one I've been circling all week.
Matt: A transmission line drops in northern Virginia
Matt: and the data centers' own control systems pull them off the grid and switch them to backup — all at once.
Matt: That ripple ran from D.C. to Chicago.
Sarah: This is where PJM's large-load fight gets real.
Sarah: And look at the timing: Bob Marshall at Ting Labs says a normal disturbance gets corrected in milliseconds.
Sarah: This one took about ten minutes to settle.
Matt: Right — and Dominion's line is “within minutes our team stabilized the situation.” Okay, but who made the call to disconnect?
Matt: Was it a protection relay, or did facility controls decide the grid was unsafe and bail to diesel?
Matt: Because those are very different stories.
Sarah: Dominion isn't saying, and that tells us something.
Sarah: What we know is that a localized outage in the densest data center cluster on earth rippled from D.C.
Sarah: to Chicago. That goes straight back to the heat-and-aging-grid story we just covered — except now we've seen it happen.
Matt: We still don't have a megawatt number.
Matt: Just a “massive amount of power.” I want the figure
Matt: because that number is the whole argument about whether the grid can take the next twelve gigawatts in queue.
Sarah: Brownwood News writes:
Quote: | AUSTIN – Governor Greg Abbott recently released the response from the Public Utility Commission of Texas (PUCT) and the Electric
Quote: Reliability Council of Texas (ERCOT) to his June 10 directive that shows they are already taking concrete steps to protect residential
Quote: ratepayers from the costs of data center expansion.
Matt: Finally — a governor's name on the answer.
Matt: Abbott's order says data centers pay for the transmission built to serve them and kick in toward actually lowering residential bills.
Matt: All week, I've been asking who eats this.
Matt: Texas just answered.
Sarah: That second half goes further than anyone else has.
Sarah: Making the load pay its own way is the cost-allocation reform PJM's still chewing on.
Sarah: Requiring data centers to help lower residential bills goes a step beyond.
Matt: Okay, but is this enforceable tariff language, or a press release with a bullet list stapled to it?
Matt: Half of it reads like directions to the PUC: “developing standards,” “clarifying authority.” What's the actual rulemaking timeline?
Sarah: Some of it's concrete.
Sarah: New data centers have to curtail fast when ERCOT tells them to, and they have to register so the state knows what's connected.
Sarah: That has teeth after the disturbance across PJM on the 22nd.
Sarah: We just covered what can happen when a grid can't order load down in real time.
Matt: Right — and then there's the Lone Star Infrastructure Protection Act
Matt: expanded so foreign actors can't use a data center to threaten the grid.
Matt: ERCOT is looking at that same abrupt-disconnect scenario and saying, we want veto power over who's allowed to get that big.
Sarah: Texas has put its policy choice in writing: data centers cover the costs, and residential load gets protection.
Sarah: PJM's still staring at a September deadline and a governance fight.
Sarah: Here's TFTC:
Quote: Imperial Valley Computer Manufacturing (IVCM) filed suit against the Imperial Irrigation District (IID) seeking 260 million gallons of
Quote: Colorado River water per year
Quote: directly reversing its public pledge since December 2025 to rely only on recycled wastewater.
Matt: Back in the spring, this was a pitch — “does not touch a single drop of the Colorado River.” I called that a wash.
Matt: Well, now it's a court exhibit.
Matt: IVCM is suing the Imperial Irrigation District for 260 million gallons a year of the very water they swore off.
Sarah: And the sequence matters.
Sarah: IID rejected the water application in early May.
Sarah: Their hand-picked board candidate lost the June primary, and then the lawsuit landed.
Sarah: They tried the ballot box first.
Matt: 750,000 gallons a day.
Matt: That's about what 7,300 Imperial County residents use in a year, per KPBS.
Matt: So the “zero-draw” campus is now in front of a judge arguing for the equivalent of a small town's worth of river.
Sarah: This answers the enforcement question, honestly.
Sarah: A voluntary project-level water pledge carries no weight.
Sarah: The December pledge wasn't binding, and now the county supervisors who fast-tracked the project in April have switched to a moratorium.
Sarah: They've given a 19-member committee until 2027 to rewrite the rules.
Matt: Hold every future “we won't touch the river” announcement up against this one.
Matt: The promise and the price tag were never in the same document.
Host: If you track the infrastructure powering AI
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Host: Find it wherever you listen to podcasts.
Host: Imperial County's 19-member committee now has until 2027 to rewrite the county's data center development rules.
Host: We'll be watching that process.
Host: You'll find links to every story in today's show notes if you want to spend more time with anything that caught your attention.
Host: That's The Data Center Daily for today.
Host: This is a Lantern Podcast.