FERC called PJM's data center backstop a mess. In writing. In a concurring statement. And Oracle just reached for the force majeure clause on a Stargate campus. Busy week for the lawyers. This is The Data Center Daily. Today: FERC and PJM, Oracle's Project Jupiter, a Korea-backed gas campus in South Texas, four hundred fifty-six reactors proposed for Utah, and a congressional probe into data center NDAs. Hit follow so the next one shows up without you hunting for it.
Ethan Howland, writing in Utility Dive:
PJM’s proposal was filed at the last minute, which left the agency no time “to rehabilitate the mess we received,” FERC Chairman Laura Swett said in a concurring statement. “This commission will not be forced into accepting a deeply flawed, eleventh-hour procurement mechanism with billion-dollar implications for consumers.”
Yesterday we had Pallone asking FERC to toughen PJM's data center cost rules. Now FERC's actually ruled. Tuesday it only partly approved PJM's reliability backstop, and PJM pulled the auction that was supposed to open Wednesday. That's six point eight gigawatts of shortfall for the 2028/29 delivery year, and right now there's no new start date. Keep the pieces straight. FERC accepted the core, including a five hundred fifty-five dollar per megawatt-day offer cap on a weighted-average basis. Per Reuters, it suspended the plan for five months. The problems are cost allocation, transmission-owner exit rules, and collateral for load-serving entities. Northern Virginia Electric Cooperative said it would've had to post roughly two billion dollars in collateral. Two billion, from a co-op. FERC also killed the opt-out for co-ops and munis as discriminatory. Good. Commissioner See put it plainly: existing customers shouldn't be left paying for new demand. FERC's suggested fix is to allocate costs on updated load forecasts, and to size the target off current numbers too. Same forecasting problem we keep coming back to. PJM wanted results before its early-December capacity auction for 2029/30. That sequencing is now up in the air.
Axel Kannenberg, writing in heise online:
According to the reports, the database specialist has sent a notification to its partner, project developer Blue Owl Capital, that it intends to claim “force majeure”, i.e., an act of God, in the event of a delayed delivery of the data center. The project is scheduled to be completed in 2028 with Oracle as the tenant.
An act of God. And the act in question is a gas pipeline permit. Project Jupiter, Doña Ana County, New Mexico. Two point four five gigawatts on about fourteen hundred acres, designed around gas-fired fuel cells. Per Bloomberg, permission for the pipeline has been repeatedly denied. Oracle says the schedule is unchanged and that notices like this are common on projects this size. Blue Owl says its financial commitments are unchanged. But Laurent Delattre's French-language reporting cites a Reuters source saying the program is slipping at least a year for lack of power. And here's the tell. Blue Owl has about three billion in equity in, earning a reduced rent during construction, and the notice lets Oracle stretch that construction period. So the developer eats the delay. Meanwhile the roughly eighteen billion in bank loans was already trading at eighty-nine to ninety-one cents on the dollar a week before the notice. Energy Transfer's pipeline is running nearly six months late after the permit refusals. The alternate route is supposed to wrap February 1, 2027. More than a quarter of the construction is done. Walls going up, and nobody can say when they'll be energized.
Here's a joint release from NextEra Energy, Related Digital and Lewis Energy Group:
At full scale, Project Star will support a privately funded 5 GW data center campus that Related Digital is developing on an adjacent site. The project will also deliver excess power generation back to the grid, helping support reliability and affordability. The project is fully consistent with Texas Governor Greg Abbott's directive that data centers bring their own generation to the ERCOT system, strengthening local infrastructure and improving service reliability for utility customers.
Project Star. Encinal, Texas. Twenty-two point three billion dollars, six point four seven gigawatts of gas generation, sitting next to a five gigawatt campus. And the power plant's owner? The Republic of Korea and the United States, jointly, under the trade deal. That's a new one for the counterparty column. Selected by Commerce and Korea, built and operated by a Related and NextEra Energy Resources joint venture. Lewis Energy brings the land, the produced water and the gas. Do the subtraction and it's roughly a gigawatt and a half above the campus at full build. That's the excess-power-to-the-grid line. First generation as early as 2029, subject to permits. Subject to permits. In Texas. Right now. On September 21, Abbott told TCEQ to halt all permits related to data center projects until ERCOT finishes its review, and Beveridge and Diamond says that reaches permits supporting power generation. So the poster child for bring-your-own-generation needs exactly the kind of permit that's frozen. To be fair, 2029 is a ways off, and ERCOT expects its report by December 10. But this is a press release. No tenant named, no interconnection detail. I'll get excited when there's an air permit.
Geoff Brumfiel, reporting for NPR, via VPM:
Valar Atomics is planning what it calls “Project Beehive” on over 9,000 acres of land held under the Bureau of Land Management near Price, Utah. The facility would include data centers and some 456 small nuclear reactors, along with a facility to produce nuclear fuel and others for storing nuclear waste, according to a proposal from the company to federal regulators.
Four hundred fifty-six reactors, plus fuel production and waste storage. This master plan brings its own fuel cycle. Scale check. Around nine point six gigawatts for the data centers. NPR notes all of Utah averages about four gigawatts of generation, peaking near ten in summer. And since 2000 the U.S. has switched on three new nuclear plants, about three point four gigawatts total. Valar's operating record is one test reactor, Ward 250, which ran a single Nvidia chip in July. One chip to nine point six gigawatts, first reactors targeted for 2028. And per NPR, Ward 250 got its fast approval after DOE quietly overhauled its own safety and security rules. So who's checking the waste site? What's real today is narrower. BLM's Utah office confirmed the application and says it's reviewing it for completeness, with a NEPA process and public input to follow. Valar also wants about 650 acres of state land. So this is an application, not a permit. The completeness call is the first gate.
Cris Tolomia, writing in Quartz:
In letters to the four companies, the Maryland Democrat demanded that each hand over its nondisclosure or confidentiality agreements with public officials, disclose projected electricity and water consumption for U.S. data centers, and explain whether those agreements have been used to block public records requests.
Jamie Raskin, ranking member on House Judiciary, sent those letters Wednesday to Amazon, Google, Meta and Oracle. And check this detail: Louisiana Gov. Jeff Landry personally signed a secrecy agreement with a Meta subsidiary tied to a fifty billion dollar data center campus. Louisiana again, where advocates are already in court trying to pry Hyperion information out of Meta. It's a minority-side letter, same as Pallone's yesterday. But the floor is moving anyway. Microsoft dropped NDAs with local governments in March, Amazon told the Wall Street Journal it's ended the practice, and Shapiro banned them in Pennsylvania by executive order in August. And per the letters, a Google rep told San Jose officials to sign to avoid a PR problem. That's the whole issue in one sentence. For planners, the ask that matters is the projected power and water use. If those numbers go public, they're worth more than the NDAs themselves.
If you follow the compute side of this buildout, 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're watching for PJM's revised backstop filing at FERC and a new procurement timeline, and for BLM's completeness decision on Valar's Project Beehive application.
Links to every story are in the show notes, so take a look at the ones you'd like to dig into. That's The Data Center Daily for today. We'll be back tomorrow. This is a Lantern Podcast.