Grid politics enter real estate

Data-center developers are learning that land is not the hard part anymore; power and water hookups are deciding which sites can actually get built. (ferc.gov) The Federal Energy Regulatory Commission said on April 16 it plans to act in June on a rulemaking about how large new loads connect to the interstate grid. The docket grew out of an October 2025 advance notice of proposed rulemaking on “timely and orderly interconnection” for data centers and other big users. (ferc.gov) That federal push follows a December 18, 2025 order aimed at PJM Interconnection, the grid operator serving all or part of 13 states and the District of Columbia. FERC said PJM’s tariff was “unjust and unreasonable” because it did not clearly spell out rates and service terms for generators and customers serving co-located data-center loads. (ferc.gov 1) (ferc.gov 2) A co-located load is a data center built next to a power plant so it can get electricity faster than a normal queue would allow. FERC told PJM in December to write transparent rules, then on April 16 accepted part of PJM’s compliance filing and ordered another filing within 30 days. (ferc.gov 1) (ferc.gov 2) The fight has moved beyond transmission law into local zoning, utility planning, and real-estate underwriting. In Ohio, regulators approved a special tariff on July 9, 2025 that requires large new data centers in AEP Ohio territory to pay for at least 85% of the power capacity they reserve, even if they use less. (aep.com) (aepohio.com) That Ohio order also cleared the way to end AEP Ohio’s moratorium on new Central Ohio data-center agreements, which the utility had imposed while it studied grid impacts. The tariff runs for 12 years and includes a four-year ramp-up period, proof-of-viability requirements, and exit fees for canceled projects. (aep.com) (content.govdelivery.com) Water is becoming part of the same site-selection math. The American Public Power Association reported in January that community opposition has pushed developers toward cooling systems and operating strategies that use less water, while a recent E&E News report said some towns are now weighing new water and sewer spending for data-center growth. (publicpower.org) (eenews.net) The local backlash is broad enough that states are starting to write it into politics. Axios reported on April 5 that 11 states had active legislation or filed statewide moratoriums on data centers, and Harvard’s Gazette reported on April 9 that residents are increasingly raising concerns about electric rates, water use, and environmental effects. (axios.com) (news.harvard.edu) Developers and utilities say the projects bring tax revenue, construction work, and digital infrastructure, and FERC has framed clearer rules as a way to protect reliability while getting new investment moving. Residents and consumer advocates are pressing the opposite question: who pays when a single campus needs substation upgrades, transmission capacity, and millions of gallons for cooling. (ferc.gov) (eenews.net) By June, FERC is expected to say more about the grid side of that dispute. On the ground, the answer is already reshaping land values: a parcel with fiber but no firm power is becoming a much harder sell. (ferc.gov)