Quick question to start the weekend. What do you call a spending plan that hasn't hit the balance sheet yet but already moved the bond market? Meta's quarter, apparently. Welcome to The Data Center Daily. It's Saturday, October 24th. Today: Meta's 825 billion dollars in future commitments, a Wisconsin transmission owner that wants data centers to pay for their wires while they're still being built, PJM telling FERC about 3,900 megawatts of load that jumped to backup power, and Amazon giving up on four buildings in Loudoun County.
Hamza Shaban, writing for Yahoo Finance:
A gauge of Meta's credit risk surged to a new record and its bonds sank, Bloomberg reported, after the company said it would spend about $825 billion in the future on computing power, AI infrastructure, and other commitments.
Meta reported on Wednesday, October 21st. Third quarter capex, including finance leases, was 34.91 billion dollars, up 80 percent. Operating cash flow was 32.8 billion, so free cash flow came in at negative 2.12 billion. A year ago it was positive 10.63 billion. By several accounts it's the first negative free cash flow quarter in Meta's history as a public company. And the 825 billion is the part I care about. One analysis of the print says those disclosed commitments rose 125 billion dollars in a single quarter. That's leases and contracts for capacity, not money already spent. So who's on the other side of those leases? Developers and landlords who financed buildings against Meta's name. Meanwhile the near-term numbers looked almost restrained. Meta raised the bottom of its 2026 capex range to 135 billion, leaving it at 135 to 145, and gave no 2027 guidance. Revenue rose 26 percent to 64.6 billion. Then the stock fell about 8 percent on Thursday, per BNN Bloomberg, and the Nasdaq had its worst day in four months. The market punished Meta for the bill, not for the business. Shaban's framing is that the spending was moved to a different spot on the timeline, not cut. Next week tells us whether the others follow. Alphabet and Microsoft report Wednesday, October 28th, and Amazon on Thursday the 29th.
Priya Raman, writing in Fracmoo:
If FERC approves the proposal, ATC says it will bill $138 million in 2027 for transmission costs associated with large-load data center projects, and its network rate will fall approximately 6 percent from the 2026 rate. Without the mechanisms, ATC says, the 2027 network rate would be 16 percent higher than the proposed level.
American Transmission Company, the Wisconsin transmission owner, went public with these pending FERC filings on Thursday. There are two mechanisms. A construction work in progress charge sends financing costs and taxes on lines built for a qualifying large load to that customer while the lines are being built. After energization, a minimum transmission charge makes sure the customer covers 100 percent of the facilities built for it, even if its usage falls short of what it requested. Finally. The construction phase is where ratepayers get stuck. Capital sits in the ground for years before a single rack powers up, and if the campus gets cancelled, everyone else has paid for wires to nowhere. This puts the interconnection requester's name on that risk. The threshold is a new or expanded load of at least 100 megawatts, or at least 100 million dollars in transmission facilities. Two cautions from Raman. These are ATC's projections of its own filing, and FERC hasn't ruled. And more than 100 million dollars of the 2027 rate reduction comes from MISO sharing the cost of regional Multi-Value Projects, not from data centers. So the 6 percent is part data center story, part accounting tailwind. Still, the line between cost-causer and system benefit is drawn in a tariff, not a press release. This is one answer to FERC's June 18th show-cause orders to all six grid operators. California's grid operator put out its own board memo dated Thursday. It proposes a 50 megawatt large-load definition, a framework to prevent cost shifting, and flexible interim interconnection while network upgrades get built. The CAISO board votes Wednesday, October 28th, with tariff filings planned for November 16th.
OGGN Staff, reporting on FERC's reliability conference:
PJM told the Federal Energy Regulatory Commission's annual Reliability Technical Conference on Oct. 21 that about 3,900 MW of large loads unexpectedly moved to backup generation on July 22, and that the grid needs enforceable rules for how data centers behave during disturbances.
Routine transmission events triggered the July transfer. PJM and the transmission owners handled it, but PJM called the resulting voltage fluctuations concerning. It's now developing voltage and frequency ride-through requirements based on that event, meaning thresholds where a facility has to stay connected instead of dropping off. Nearly four gigawatts going to diesel all at once because of a routine fault. That's a few big power plants' worth of demand vanishing from the grid, then coming back whenever it decides to. The operators need to know the trip settings in those halls before the next one. Christopher Pilong, PJM's senior director of operations planning, gave the other half. Data center load is nearly flat, which squeezes the spring and fall maintenance seasons. His words: "It really is like a rising sea level." He pointed to October 12th through 14th, when heat up to 20 degrees above normal combined with equipment out for maintenance and triggered emergency procedures. And on non-firm service, he said PJM needs data centers to follow operating instructions the way generators do while construction catches up. Quote, "There is no other solution." I'll give him that one. For continuity: on October 19th we covered NERC's computational load standards clearing their final ballot. PJM says it's part of NERC's Large Computational Load work, and it's preparing its response to FERC on non-firm transmission service.
Oliver Haslam, writing in Tom's Hardware, citing The Washington Post:
Weissman added that “While we see the property’s legal development potential differently than the County does, we concluded that the best outcome for all is to come together on a shared vision for this campus rather than engage in costly litigation.”
That's Josh Weissman, Amazon's vice president for data center development. Amazon will no longer build four data centers on the former George Washington University campus in Loudoun County. Most of the 122 acres goes to mixed-use and residential development. Amazon will donate 25 acres to the county for an arts center and recreation facility, and put 5 million dollars into the county's housing fund. In Data Center Alley. Amazon submitted the plan in July. Board Chair Phyllis Randall met with the company in September and suggested another use for the land. Then the company decided a lawsuit wasn't worth it. When Loudoun says no, the map has officially changed. It also lands in a week when the politics shifted. On Wednesday, October 21st, President Trump posted on Truth Social that large new data centers are, quote, "mandated by me to make their own electricity," and should pay communities a dividend. The Northeast Times found no executive order or Federal Register action behind it as of Thursday. A mandate with no order is a slogan. Who enforces it? Ratepayers in PJM can't pay their bills with a Truth Social post. The Associated Press frames the industry response as more money and fewer secrets. Meta and Amazon each say they'll spend 1 billion dollars on host-community incentives, and Google says it will pay full property taxes at new campuses. The AP calls anti-data center sentiment a potent issue in the midterms, which are Tuesday, November 3rd.
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That's the briefing. We're back with the next episode on Monday, October 26th, the day before the CAISO vote and a busy earnings week. The Data Center Daily is a Lantern Podcast. Enjoy the rest of your Saturday.