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US Data Center Briefing · December 20, 2025

December 20, 2025

Utility capacity expansion accelerating for data center load (Georgia +10,000 MW) Michigan Saline Township Oracle–OpenAI campus advances with strong utility contract protections FERC pushes PJM colocation and large-load transmission service design on tight timelines Transmission and permitting backlash intensifies (Virginia 500 kV line; Ohio water discharges) Rising political/regulatory scrutiny of incentives, process legitimacy, and environmental impacts

Market overview (North America | 20 Dec 2025)

AI-driven load growth continues to force “system-level” responses across generation, transmission, and regulation—shifting project risk from pure real estate execution to power contracting, cost allocation, and permitting. This week’s newsflow highlights (i) regulators increasingly willing to approve large-load power contracts with strong credit protections, (ii) rapid policy work on large-load interconnection and colocation, and (iii) mounting community pushback (transmission siting, water impacts, zoning/tax incentives) as data centers become a mainstream ratepayer and land-use issue.

Risks and watchpoints (near-term)

  • Demand-risk and stranded-capex risk shifting onto utilities/ratepayers: Georgia Power’s plan to add ~10,000 MW at $16.3bn comes with explicit warnings from opponents about downside if data center demand falls (Georgia approves 50% power expansion to serve data centers).
  • Regulatory process and legitimacy risk: Michigan’s fast-track approval of DTE contracts for the Saline Township campus drew criticism over an uncontested ex parte process and limited local participation (Michigan commission approves DTE data center despite community concerns).
  • Interconnection/colocation rule uncertainty (PJM): FERC is pushing PJM to create new transmission services and define terms for colocating large loads at existing plants—creating near-term opportunity for behind-the-meter strategies but also compliance/rate-design uncertainty (FERC orders PJM to develop data center colocation rules).
  • Transmission siting backlash in “Data Center Alley”: Loudoun County resident opposition to Dominion’s proposed 500 kV Golden-to-Mars line is intensifying; the Virginia SCC decision is expected in January and could set precedent on undergrounding/cost responsibility (Virginia residents oppose Golden to Mars transmission line).
  • Water and discharge permitting as bottleneck: Ohio EPA’s proposed general permit for cooling/boiler wastewater discharges opens a new regulatory pathway but has heavy scrutiny and a comment window to 16 Jan 2026—risking delays and added conditions for new builds (Ohio EPA proposes permit to allow data center discharges).
  • Materials and supply chain inflation: Elevated uncertainty around tariffs and surging copper/metal demand (energy transition) increases risk to electrical balance-of-plant costs and schedules (Everstream highlights tariffs, metal demand and supply risks).

Key deals and projects (campus / development)

Michigan: Saline Township Oracle–OpenAI “Stargate” campus

  • Michigan regulators approved DTE Energy’s request to serve a 1.4 GW development with contracts featuring upfront collateral, minimum charges, and a termination fee—a structure that reduces utility counterparty risk and may become a template for other large-load approvals (Michigan approves DTE to power Oracle-OpenAI data center).
  • Oracle separately stated it will build and operate a major AI data center campus in Saline Township to serve OpenAI, with closed-loop, non-evaporative cooling and privately funded energy infrastructure under a 17+ year service agreement with DTE; Oracle expects to contribute ~$300m annually toward fixed energy costs by 2029–2030 (Oracle to build major AI data center in Michigan).
  • Environmental permitting/community scrutiny remains active: a hearing addressed a permit to disturb 10 acres of wetlands for the project; additional Michigan capacity proposals are also surfacing (Michigan hearing on wetlands permit for Saline data center).

Texas: land-backed campus strategy

  • Texas Pacific Land Corp. partnered with Bolt Data & Energy to develop large-scale West Texas campuses on TPL land. Bolt raised $150m and TPL invested $50m (reported $200m partnership). TPL receives equity, warrants, and a ROFR to supply water; Bolt plans natural gas-fueled, renewable, and ultimately nuclear supply strategies (Bolt and TPL partner to build West Texas data centers).

Arizona: binding county framework around renewables and water

  • Pima County executed a binding MOA with Beale Infrastructure for the $3.6bn Houghton Data Center with enforceable water, energy, and 100% renewable matching commitments, including an Energy Supply Agreement for phase 1. Beale will pay ~$21m for the site; projected $58.8m county tax revenues over 10 years and 180+ permanent / 3,000+ construction jobs (Pima County and Beale sign MOA for Houghton Data Center).

Pennsylvania: reuse of thermal generation sites

Michigan (other): smaller-scale capacity with phased funding

Power & grid / interconnection highlights

  • Georgia capacity build-out: Georgia PSC approved Georgia Power’s plan to increase generating capacity by ~50% (~10,000 MW); construction estimated at $16.3bn with customers projected to pay $50–$60bn over coming decades. Georgia Power agreed to use new-customer revenue to apply downward pressure on rates 2029–2031 (at least $8.50/month) (Georgia approves 50% power expansion to serve data centers).
  • PJM colocation framework underway: FERC ordered PJM to create rules enabling data centers to colocate at gas and nuclear plants, including three new transmission services within 60 days and a Jan. 19 report on integrating large loads (FERC orders PJM to develop data center colocation rules). Related coverage emphasizes that this follows disputes such as Amazon’s proposed colocation at the Susquehanna nuclear plant and broader shortage concerns in a region serving ~65m people (FERC allows data centers to connect directly to power plants).
  • PJM market signal: Capacity prices hit $333.44 per MW-day, up ~1,000% over ~two years; cleared supply 134,479 MW was ~6,600 MW short of the reliability requirement. Talen expects >$1bn in capacity revenues for the 2027–2028 planning year (PJM capacity prices surge as data centers tighten supply).
  • Transmission siting risk (Virginia): Dominion’s proposed 500 kV Golden-to-Mars line faces organized opposition and calls for undergrounding and cost assignment to data center customers; Virginia SCC decision expected January (Virginia residents oppose Golden to Mars transmission line).

Policy and regulatory developments

  • Water permitting (Ohio): Ohio EPA proposed a five-year general permit allowing qualifying data centers to discharge specified cooling/boiler wastewaters under conditions; comments open through 16 Jan 2026 and final approval rests with the Director (Ohio EPA proposes permit to allow data center discharges).
  • Maryland: mandated studies and planning capacity: The General Assembly overrode the Governor’s vetoes to require studies of GHG costs and data center impacts and to establish an energy planning office (Maryland lawmakers override governor on climate, data center bills).
  • Michigan incentives under pressure: Bipartisan lawmakers introduced a three-bill package to repeal data center sales/use tax exemptions that have attracted at least 14 hyperscale proposals, including the Saline Township project (Michigan lawmakers seek repeal of data center tax breaks).
  • Local/community agreements setting new “operating constraints”: A court-filed settlement for a Pittsburg data center requires rooftop solar, recycled-water cooling, 100% renewable energy, wildlife surveys, and a $750,000 climate resiliency payment; the Center for Biological Diversity will not oppose phase 1 and future phases need separate environmental review (Agreement secures renewables and recycled water for data center).
  • Political risk: national pushback narrative: Calls for a national moratorium on new data center construction are being amplified by Senator Bernie Sanders and 200+ environmental groups, citing energy/water/emissions concerns and activism blocking/delaying ~$64bn of plans (US calls for data center moratorium amid AI energy concerns).

Technology, delivery capacity, and “enablers”

What to watch (next 2–6 weeks)

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