Three institutions changed posture on the data-center grid problem in a single day. AEP told Wall Street it might leave PJM and might serve its big new West Virginia loads through an unregulated subsidiary instead. PJM published a paper saying the market is in “disequilibrium” and laid out three reform paths, one of which would let the grid cut some customers off when supply runs short. And the FBI raided the Virginia state senator who has been the principal driver of ending the state's data-center sales-tax exemption.
American Electric Power CEO Bill Fehrman told analysts Tuesday that the country's largest transmission utility is reviewing how — or whether — it stays in PJM Interconnection and the Southwest Power Pool. The named complaint: PJM is too slow at hooking up the new generation AEP's customers need. AEP's utilities now have 63 gigawatts of contracted new large load coming online by 2030, and nearly 90% of it is data centers. About 16 GW of that is inside PJM. AEP is also considering serving its big new West Virginia loads through a non-utility “genco” model — meaning generation built outside the rate base and outside the protections that public utility commissions exist to enforce.
Fehrman, on the call: "The current state of PJM's performance and stakeholder approval process does not give me great confidence that these issues will be resolved anytime soon. There's efforts that the government has put into place to try to move PJM along and SPP along, and there's fits and starts on that, and it's not really moving that quickly."
The Q1 earnings package included a $6 billion increase to the five-year capital plan, bringing it to $77.9 billion, and an estimate that AEP's residential customers will face roughly 3.5% annual rate increases through 2030.
Source: Ethan Howland / Utility Dive.
PJM Interconnection issued a board-commissioned reform paper Wednesday addressed to power plant operators, investors, utilities and consumers. It opens by saying the grid is in “a transition from an era of managing surplus to an era of managing scarcity — one that is anticipated to persist for some time.” The paper identifies three reform paths. The most consequential is the second one: discard the foundational principle that all customers, large and small, share the same standard of reliability, and build a framework “that differentiates between customers that can and cannot be cut off.” That is the policy-document version of an argument that's been circulating for a year — that data centers should not be allowed to lean on the shared pool the way residential customers do.
PJM CEO David Mills, in a letter accompanying the paper: "Wholesale electricity markets are extraordinary institutions, and their most essential infrastructure is not a price curve or a performance obligation — it is legitimacy. Generators, utilities, investors and consumers must all believe, at a basic level, that the rules are fair, stable and the product of a process they recognize as credible."
Pennsylvania Gov. Josh Shapiro, who sued PJM in 2024 over record auction prices, pushed back through spokeswoman Rosie Lapowsky: "A core reason why the reforms described in this report are needed is that PJM hasn't been moving fast enough to connect new resources for many years and continues to deny states a full seat at the table."
Source: Marc Levy / Pennsylvania Capital-Star.
Federal agents executed court-authorized searches Wednesday morning at the Portsmouth legislative office of Sen. Louise Lucas, the Democrat who chairs Virginia's Senate Finance and Appropriations Committee, and at the cannabis business adjacent to her office. SWAT teams arrived at The Cannabis Outlet with weapons drawn. At least three people were placed in handcuffs. Witnesses saw federal agents carrying boxes out of Lucas's legislative office. No charges have been filed. Federal authorities have not publicly indicated whether the raids relate to her cannabis business, her legislative activity, or another matter.
Lucas, in a statement on X, called the raid “political intimidation” and tied it to last month's redistricting referendum, which she helped lead. House Speaker Don Scott (D-Portsmouth) said: "Senator L. Louise Lucas has not been charged with anything. People should take this with a grain of salt and allow the facts to come out before jumping to conclusions." Virginia Attorney General Jay Jones cited recent failed federal prosecutions of former FBI Director James Comey and New York AG Letitia James and “urged everyone to exercise restraint in judgment."
For the energy beat: Lucas has been the principal Senate driver of legislation to end Virginia's $1.6 billion-a-year sales and use tax exemption for data centers, redirecting the money to transportation, education, and local priorities. House Democrats and Gov. Abigail Spanberger have resisted, creating the budget impasse that has kept the state's $212 billion biennial budget from being completed. Whatever the FBI investigation is about, the day-to-day capacity for that legislative work is now disrupted.
Source: Markus Schmidt / Virginia Mercury.
In a Wednesday op-ed, Rotimi Adeoye, a contributing Opinion writer, paired two cases. In Tremont Township, Pa. — population 300 — supervisor Larry Bender, a Trump supporter, learned only after the deed was recorded that the federal government had purchased the township's largest commercial property, a 1.3-million-square-foot warehouse, to convert into a 7,500-bed ICE detention facility. The township stood to lose roughly $200,000 a year in tax revenue, and the local Pine Grove Area School District more than $500,000. In Mason County, Ky., Delsia Bare's family was offered $26 million for 550 acres — ten times the market rate — by an unnamed AI company that had landowners and town officials sign nondisclosure agreements. She backed out. The company moved on to her neighbors.
Nicol Turner Lee, director of the Center for Technology Innovation at the Brookings Institution, told Adeoye: "There really isn't a substantial notice period to do the type of environmental and economic analysis to determine if a data center is actually right for your community. The political pressure that this administration has placed on companies to build either data centers or detention centers is so real that communities have been reduced to collateral damage."
Adeoye's policy ask is narrow and concrete: Congressional disclosure requirements before companies and federal agencies can buy or rezone large rural properties. Not vetoes. Just notice. Data center land transactions are now averaging 224 acres a year, up 144% since 2022.
Source: Rotimi Adeoye / The New York Times Opinion.
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