AI wants more power. Today, policymakers are asking who signs the check if the project disappears. This is The Data Center Daily. A transmission tax-credit push, California putting big-load customers on the hook, and one Kansas buildout getting smaller—let's start there. This one's from Latitude Media:
Sen. Martin Heinrich (D-N.M.) today is introducing a bill that would give a 30% tax break to long-haul transmission lines, Latitude Media has learned. The 10-year investment tax credit would apply to new lines and upgrades that cross interstate and regional boundaries — or are at least 100 miles long — as well as those in the U.S. Outer Continental Shelf where offshore wind is often sited.
Heinrich’s offering a 30% ITC for ten years, but only for lines adding at least 500 megawatts and crossing regions or running 100 miles. Great. Now point to the projects that clear that bar and can survive a Republican Senate. It's deliberately narrow. That 500-megawatt floor targets the billion-dollar regional lines, not the smaller upgrades that can still hold up a data-center energization. And the need is hardly theoretical: FERC puts new high-voltage line construction at around 400 miles in both 2023 and 2024, versus nearly 4,000 in 2013. We did not misplace 3,600 miles a year in the couch cushions. Latitude reports Heinrich has no Republican cosponsor, so this is more of a platform marker than a construction schedule. Still, a 10-year credit aimed at long-haul capacity is aimed at the physical bottleneck—not another round-number speech about AI demand. Jessica L. Bayles and colleagues, writing in Stoel Rives LLP:
California’s newly enacted California Technology Innovation and Ratepayer Protection Act will reshape how data centers connect to the electric grid and obtain retail electric service. This legal alert explains the requirements created by SB 886 and AB 2383, including new interconnection and generation service tariffs, cost-allocation rules, collateral and termination fee obligations, and exemptions for certain facilities.
California signed SB 886 and AB 2383 on September 21. They take effect January 1, 2027, and the CPUC has until January 1, 2028 to build the tariffs—so the mandate is real, but the operating rules are still a year out. And those rules include collateral and termination fees. If a giant load wants a bespoke interconnection, then walks away, California wants that customer holding the bill instead of everybody else on the monthly statement. Good. The transmission bill we just covered tries to put more steel in the ground. California is making customers bear the downside when a data-center commitment evaporates. Different tools, both aimed at a grid that's run out of free options. Now watch the deal paperwork. An announced campus with a soft customer looks very different once collateral and termination exposure show up in the term sheet. Here's what Sydnie Savage at Kansas City Business Journal is reporting. There it is: Digital Realty’s De Soto plan shrinks to a 450,000-square-foot first phase because the build-to-suit client fell through. The anchor tenant was the whole deal. The revised northern campus is still expected to reach 1.5 million square feet, though it remains a plan rather than an energized facility. A two-story first phase looks very different without a committed customer behind it. And after the California rules we just covered, this is why collateral and exit fees matter. Somebody lines up power, land, and substations. The minute the customer walks, everybody else is staring at the invoice. Turns out “insatiable” has a lease clause. Mingtiandi, with Christopher Caillavet:
Amazon Web Services has agreed to buy two data centre projects in Hong Kong’s New Territories from debt-laden developer Grand Ming Group for up to HK$2.45 billion ($312 million), in a deal that would turn an existing tenant into the owner.
AWS has agreed to pay Grand Ming up to HK$2.45 billion—$312 million—for two Fanling projects totaling 16 megawatts of IT load. The base price is HK$2.18 billion, with another HK$265.8 million tied to finishing the remaining phases. AWS was already the tenant, and now it’s buying the landlord’s problem. Grand Ming says it needs the sale to reduce debt after its auditor raised doubts about whether the company can stay viable—there’s your negotiating leverage. The first phases of iTech Tower 3.1 were delivered to AWS last December; the rest is still in fitout. So AWS gets control of an operating foothold plus unfinished capacity, not a shiny new 16-megawatt campus appearing overnight. Two earlier buyer talks failed. On the third try, the deal worked because the customer had every reason to keep the site alive—and enough cash to wait out a distressed seller. Here's Ari Peskoe at Utility Dive:
The surge in data-center energy demand and related power price increases has put the spotlight on PJM Interconnection processes that can culminate in market-rule changes or can reinforce the status quo. In this piece, I discuss the Federal Energy Regulatory Commission’s legal authority to approve or order changes to PJM’s governance and conclude that FERC’s jurisdiction over transmission governance allows it to modify filing-rights allocations and adjust PJM’s nominating committee.
Ari Peskoe’s point is one PJM insiders hate to say out loud: whoever holds filing rights can bottle up rule changes while power prices climb. FERC can alter those allocations and the nominating committee—it doesn’t have to sit there admiring the traffic jam. Peskoe is making a legal argument, not announcing a FERC order. His argument is specific: under its transmission-governance jurisdiction, FERC could touch filing-rights allocations and PJM’s nominating committee. Good. A 30% tax credit for long-haul lines only helps if somebody can actually get a regional rule through. You can subsidize steel all day; PJM still has to decide who gets to move the paperwork. Governance reform doesn't put an energization date on the calendar. Still, it goes straight at the machinery that decides whether new transmission proposals advance—or become another very expensive committee exhibit. If you’re enjoying The Data Center Daily, please subscribe or leave us a review wherever you’re listening. Reviews help other people find the show, and we really appreciate your support.
Looking ahead, California’s data-center laws take effect January 1, 2027, and the state utilities commission has until January 1, 2028 to set the tariffs. We’ll also be watching whether the remaining iTech Tower phases are completed, which determines whether Grand Ming receives up to HK$265.8 million in additional compensation from AWS.
Links to every story are in the show notes, so take a look at the ones that caught your attention. That’s The Data Center Daily for today. We’ll be back tomorrow. This is a Lantern Podcast.