The Department of Energy just walked into FERC with an invoice, and it's addressed to the data centers. Quick recap of how we got here. PJM's capacity crunch has been heading for a cost-allocation showdown at FERC for a while. PJM filed a framework making data centers pay for new reliability capacity and bring their own generation. Rep. Frank Pallone urged FERC Chairman Laura Swett to go further. Then on September 29, FERC suspended PJM's 6.8 gigawatt reliability backstop procurement until February 28, 2027, citing flawed cost allocation, transmission owner exit rules and collateral demands. This is The Data Center Daily. Today: Washington picks a side on who pays, a power deal where both ends of the table look awfully familiar, and Duke's clean tariff. Where'd it go? We start with what DOE actually put in the docket. We'll keep tracking this story — PJM large-load framework at FERC. Follow the show so the next update finds you. Branka Narancic, writing in Discovery Alert:
The US Department of Energy (DOE) told federal regulators on Wednesday, 7 October 2026 that PJM Interconnection must rework its stalled 6.8 GW backstop procurement so that data centres, not existing customers, pay for the power they need. According to Utility Dive’s Ethan Howland, the filing appears to be DOE’s first of its kind at the Federal Energy Regulatory Commission (FERC) in at least five years.
Okay, I've got nothing to yell about on this one, and it's bugging me. DOE told FERC on October 7 that PJM has to rework its stalled backstop procurement so data centers, not existing customers, pay for the power they need. And with the Ratepayer Protection Act dead in the Senate, the fight's moved to the regulator. And per Utility Dive's Ethan Howland, it's DOE's first filing like this at FERC in at least five years. So, not a routine comment letter. The gap is 6,831 megawatts, after the 2028/29 auction cleared at its $325-a-megawatt-day cap and still came up short. Cleared at the cap and still short. And nearly 5,100 of the last cycle's 5,250-megawatt load jump was data centers. You don't get a cleaner answer to who's driving the bill. Now, the catch: if they make the big load pay and the project slips or gets cancelled, somebody's still stuck holding the steel. Which is why I'd hold the applause. PJM's Special Members Committee meets October 22, and the refiling's due October 29. Watch two things in that filing: the dollar figure, and the in-service date. Until both show up, all we've really got is a federal position on paper. Here's Colocation Scout:
Applied Digital disclosed in its quarterly report filed October 7, 2026 that on October 4 it signed a power purchase agreement and a credit support agreement with Base Electron for capacity and energy from an approximately 1,200 MW natural gas plant that Base Electron plans to develop in Center, North Dakota. The plant is intended to provide dedicated generation for Applied Digital's Polaris Forge 3 campus.
Okay, Applied Digital. Fifteen-year PPA, fixed monthly payments, roughly 1,200 megawatts of gas in Center, North Dakota. And the seller? Base Electron. Applied Digital owns about ten percent of it, and CEO Wes Cummins helps own and run it. So who's across the table? Wes is. Disclosed in the 10-Q filed October 7, so credit where it's due, it's on paper. Signed October 4, PPA plus a credit support agreement. For a plant that, as of that filing, Base Electron still just plans to develop. Right, and that credit support agreement is what gets me. Whose balance sheet is propping up whose? Plus Base Electron can walk if there's no financial close by March 31, 2027. So it's a fifteen-year contract with an exit ramp built into year zero. And check the calendar. Polaris Forge 3 targets initial ready-for-service in the second half of 2027. Financing on a 1.2-gigawatt gas plant closes, best case, that March. So the dedicated generation shows up after the first tenants do, and the grid covers the gap. Which drops us right back into the who-pays fight from the top of the show. Latitude Media writes:
That original announcement was made with much fanfare at a White House summit. But over two years later, it still hasn’t led to a formal tariff proposal. The next time Duke itself mentioned a CTT in an official proceeding was February 2026, when the idea resurfaced in a settlement over the proposed merger of Duke’s two Carolina utilities.
Yesterday I wanted to know who's on the hook in Duke's deal. Now I know. Under the final large-load tariff, the big load covers dedicated infrastructure, posts transmission collateral, and signs ten-to-fifteen-year contracts. Honestly? Good. That's the part I wanted. Following up on that North Carolina settlement: the final tariff's filed, and the clean transition tariff promised back in 2024 still hasn't shown up. Duke announced it at a White House summit in May 2024, with Amazon, Google, Microsoft and Nucor on stage. And per Latitude, there's still no formal proposal more than two years later. So the piece that protects the ratepayer survived, and the piece that made the summit photo op just vanished. Even the North Carolina AG's office says Duke's efforts have 'languished.' The Clean Energy Buyers Association wants the commission to force a filing within six months. Last official sighting was February's merger settlement, where Duke committed to consider, in good faith, a proposal from Google. That's a commitment to open your mail. Line it up next to the DOE filing and DTE's twenty-year terms, and you see the pattern. The cost keeps landing on the big load, and the clean option keeps getting left behind. If you follow the infrastructure behind AI, try 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.
Looking ahead: the PJM Special Members Committee meets October 22, ahead of the backstop procurement refiling at FERC due October 29. And Base Electron can terminate the Applied Digital PPA if the 1,200 megawatt Center, North Dakota gas plant misses financial close by March 31, 2027.
Links to every story are in the show notes, so dig into whichever ones grabbed you. That's The Data Center Daily for today. We'll be back Monday. This is a Lantern Podcast.