The grid just got a very expensive reminder that data centers don’t get to opt out of physics. If you're just joining us, PJM’s data-center load problem has gone from forecast risk to market design and interconnection mechanics. So far, that’s meant an expedited large-load track, reliability-backstop work, pressure over governance and federal oversight, and 715 generation projects totaling 201.5 GW accepted into the first cycle of its reformed queue. The challenge is keeping reliability credible without socializing every upgrade cost. This is The Data Center Daily. Today: a PJM fault, mandatory ride-through, and a Kansas campus asking its town to help fund the plumbing. Start with PJM. On July 22, one fault knocked more than 3 gigawatts of data-center load offline. We’re talking an operating event, not a consultant’s sensitivity case. Young Zhan Heng and Shikhar Gupta at The Business Times have the details. Digital Core REIT is proposing a US$315.9 million North America asset sale to Digital Realty, while buying a 2.5% stake in Singapore’s Digital Loyang 2 for S$87.4 million. Sell mature North American exposure, buy a very small ticket into Singapore—call it portfolio surgery, a long way from a new campus announcement. And it’s a proposed sale, so let’s keep the confetti in the drawer. But if the proceeds reduce leverage, Digital Realty is effectively buying assets while Digital Core gets some balance-sheet air. Right. The key details are the named buyer and stated use of proceeds. A US$315.9 million transaction has more substance than the usual data-center press release, where everybody poses beside a rendering and calls it capital formation. ET Datacenters has the details on this one. More than 3 gigawatts of data-center load dropped off PJM during the July 22 fault. Put a date on it, put a meter on it—this is what a grid event looks like when giant loads don’t ride through. Update on PJM’s large-load story: after those events exposed the reliability risk, mandatory ride-through is where the rules are heading. ERCOT’s rules took effect August 1; PJM operators and developers should assume this is becoming an interconnection condition, not a polite suggestion. And I’d like the operator list, please. If a facility tripped in that 3-gigawatt shed, somebody’s SLA had a very bad afternoon while the grid was trying to stay upright. PJM has accepted 715 generation projects totaling 201.5 gigawatts into its reformed queue. More supply helps, eventually—but large loads still have to behave during the fault in front of them. From Liam Westbrook at Hoodline:
Digital Realty, which bills itself as the world's largest data center developer, wants public tax incentives to help build a sprawling new server campus in De Soto, Kansas, a city of about 6,300 residents that is already absorbing one massive data center project. The company has submitted an application for a tax increment financing district to help cover costs for the first phase of the development, though it has not disclosed how much money it's asking for.
De Soto has about 6,300 residents, and Digital Realty wants a TIF district for a campus that starts at 600 megawatts and could scale to 2 gigawatts. The city still doesn’t know how big the tax-break request is. They’re being asked to sign off on a subsidy before anyone names the price. Very comforting. There’s at least a defined build behind the application: nine buildings, with phase one on 281 acres. Groundbreaking is targeted for 2027 and completion for 2028, pending approvals. Digital Realty has also bought roughly 1,400 acres. That’s a real land position. And the public side is being asked to trust a lot. The total project cost and TIF ask aren’t disclosed, and neither is a tenant. Meanwhile, developer-funded transmission and wastewater have to serve a campus that may reach 2 gigawatts. Those are not decorative utilities. Digital Realty is selling North American assets to reduce leverage while seeking local infrastructure support for De Soto. Both can make sense. Still, the City Council should price the public contribution before approving a development timetable that runs through 2031. From Jim Rossi at Utility Dive:
In April, incumbent utilities in MISO and SPP seized on that strain to make a remarkable ask. A coalition calling itself the Grid Acceleration Coalition — ITC, Ameren, American Transmission Company (ATC), Entergy, Evergy, Xcel and others — asked the Federal Energy Regulatory Commission to suspend competitive bidding for transmission projects across grid operators MISO and SPP for five years, or to let utilities bypass it project by project.
Evergy is in this Grid Acceleration Coalition asking FERC for five years without competitive transmission bidding—and it’s also the utility backstopping Digital Realty’s 2-gigawatt De Soto plan. That’s a pretty convenient overlap. The coalition says bidding adds 16 to 20 months. Okay—then show FERC where the delay sits. A five-year regional exemption is a very large remedy for a scheduling complaint. And De Soto just heard about developer-funded transmission and wastewater while the tax-incentive ask is still being weighed. Now the serving utility wants fewer chances for somebody else to build the wires cheaper. Ratepayers are apparently invited to admire the efficiency. Jim Rossi puts it bluntly in Utility Dive: these incumbents lost the right-of-first-refusal fight in statehouses and at bids, then took the same objective to FERC. Large-load campuses are multiplying, so transmission planning needs speed—but it also needs a price check. Here's PR Newswire:
Twain Financial Partners ("Twain"), a specialty finance firm investing across the power, digital infrastructure, and real estate sectors, closed its inaugural securitized letter of credit facility (the "Securitization"), establishing a platform designed to meet the growing demand for interconnection security credit solutions for digital infrastructure, renewable energy, battery energy storage and thermal generation projects.
Twain just turned the MISO ERAS M2 security posting into a finance product. Your queue position now comes with a letter-of-credit desk and, presumably, a bill for the privilege of keeping it. The first transaction closed August 6 for a utility-scale battery project, but Twain is explicitly pitching this across data centers, renewables, storage, and thermal generation. It preserves developer liquidity while interconnection studies grind on—useful, though it also makes the queue more dependent on credit capacity. Exactly. At M2, MISO asks a developer to show it can carry the security requirement before moving ahead. Cash used to be the filter; now a securitized LOC can be. Better hope the projects behind those postings are more than PowerPoint with a strong banking relationship. A real bottleneck just got a real financing tool. The next useful disclosure is volume: how much letter-of-credit capacity Twain can actually put behind interconnection security, and at what cost. If you like The Data Center Daily, you may also enjoy AI Daily Briefing: top AI news for engineers, founders, and investors, with real capabilities versus demo hype explained fast, every weekday. Find it wherever you listen to podcasts.
We’ll be watching for De Soto City Council’s future public hearing on Digital Realty’s tax increment financing application, along with FERC’s response to the Grid Acceleration Coalition complaint seeking to suspend competitive transmission bidding in MISO and SPP.
Links to every story are in the show notes. Take a look at the ones you’d like to explore further. That’s The Data Center Daily for today. This is a Lantern Podcast.