Infrastructure Intelligence No. 03: Load Becomes a Grid Reliability Issue

Energy. Power. Development. Capital. | September 15, 2026 | Issue No. 03

THE WEEK IN INFRASTRUCTURE

For the past two weeks, Infrastructure Intelligence has followed the convergence of digital infrastructure and power infrastructure. This week adds another dimension: data centers are no longer simply large consumers connected to the grid. Their electrical behavior is becoming part of grid reliability itself.

PJM disclosed that nearly 4,000 MW of data-center load unexpectedly disconnected during a July system disturbance in Northern Virginia, forcing operators to manage abrupt changes in generation-load balance, voltage and frequency. PJM is now proposing ride-through requirements for computational loads. NERC is simultaneously advancing new work around computational-load event reporting, modeling and reliability studies.

Meanwhile, ERCOT has moved from classifying Batch Zero projects to actively verifying them. Pennsylvania has broken ground on a 2 GW data-center campus designed around dedicated onsite generation. Vantage closed a 2 billion dollar financing facility aimed at early-stage data-center development. And DOE has begun the formal implementation process for Executive Order 14421, bringing equipment origin and supply-chain security deeper into project diligence.

The common thread is becoming difficult to ignore. The electrical system is no longer downstream of development. It is becoming the organizing framework around which development occurs.

01 | THE LEAD

When 4 GW of Data Centers Disappear, Load Becomes a Grid Reliability Issue

One of the most consequential data-center developments of the week did not involve a new campus, financing round or power purchase agreement. It involved what happened when existing data centers suddenly stopped taking power from the grid.

On September 10, PJM disclosed additional details surrounding a July 22 event in Northern Virginia in which nearly 4,000 MW of data-center load unexpectedly disconnected from the PJM system during a transmission disturbance.

The facilities transitioned to onsite backup generation, but from the grid perspective, approximately 4 GW of demand disappeared almost simultaneously.

PJM and Dominion operators then had to respond to the resulting imbalance between generation and load, along with changes in transmission voltage and system frequency. PJM said it has now observed three measurable large-load disconnection events during the past two years.

PJM is proposing new requirements that would require computational loads, including data centers, to ride through normally cleared transmission-system disturbances rather than disconnecting in a way that creates additional reliability risk. The grid operator intends to advance the requirements quickly and expects to file proposed solutions with FERC in November. These are proposals. Nothing has been filed with or approved by FERC.

This represents an important shift. Historically, reliability requirements of this nature were associated primarily with generators. Now the scale and power-electronic behavior of AI infrastructure is forcing grid operators to think about major loads in similar terms.

Developer Takeaway

For hyperscale development, electrical design can no longer focus solely on obtaining power and maintaining uptime inside the facility. Developers will increasingly need to understand how the facility behaves from the grid perspective.

UPS systems, backup generation, power conversion equipment, control schemes, protective relays, load-transfer logic, ramp rates and ride-through characteristics may all become part of interconnection diligence.

A data center can protect itself during a disturbance and still create a problem for the broader grid. The next generation of mission-critical design must accomplish both: protect the compute load, and protect the electrical system to which it is connected.

02 | POLICY & GRID SECURITY

EO 14421 Moves From Executive Order to Implementation

Executive Order 14421, covered in Issue No. 01, is beginning to move from policy statement to regulatory implementation.

DOE has now issued a formal Request for Information seeking industry input on how the federal government should implement the August 26 order addressing foreign-produced bulk-power system equipment and related national-security risks.

DOE is seeking input on equipment scope, foreign entities, supply-chain risk, existing installed equipment, mitigation measures, vendor prequalification, domestic manufacturing and the economic consequences of potential restrictions.

A public DOE webinar was scheduled for September 16, with written responses due October 9, 2026.

The important point for developers is that DOE is not proposing a blanket prohibition on all foreign equipment. The implementation process is intended to determine which equipment, suppliers, software, firmware and transactions create unacceptable national-security risks, and what mitigation may be required. No rule has been proposed or adopted. This remains an information-gathering stage.

Developer Takeaway

This is moving equipment provenance into the front end of project diligence. A developer evaluating transformers, high-voltage equipment, control systems, power electronics or other bulk-power components should increasingly be asking: Where was the equipment manufactured? Who controls the supplier? What software and firmware does it contain? Can it be remotely accessed? Are critical subcomponents sourced elsewhere? Could future DOE rules affect installation or operation?

Those questions may eventually become as important as price and lead time. Procurement strategy is becoming compliance strategy.

03 | POWER & GRID

ERCOT Begins Auditing the Batch Zero Pipeline

The ERCOT Batch Zero process, introduced in Issue No. 01 when the large-load queue was paused, entered another phase on September 9.

Following provisional project classifications issued earlier this month, ERCOT began sending verification Requests for Information to a majority of the large-load entities conditionally included in Batch Zero.

The verification process stems from Governor Greg Abbott August directive that ERCOT audit data-center projects before allowing them to advance through the interconnection process.

The distinction is important. Batch Zero is no longer merely asking whether projects meet study-entry requirements. ERCOT is now testing the credibility of the projects behind the requests.

That is significant in a market where proposed large-load demand has grown far faster than physical infrastructure can reasonably accommodate. Inclusion in Batch Zero remains conditional, and projects have not been cleared to advance.

The ERCOT Board was also scheduled to receive another Batch Zero update at its September meeting.

Developer Takeaway

The value of a speculative power position is likely to decline as grid operators increase verification. Conversely, the value of a development-ready power position should increase.

Projects with demonstrable site control, realistic phasing, credible counterparties, validated electrical models, infrastructure planning and capital readiness will increasingly differentiate themselves from projects that simply hold a place in the queue.

For developers, that creates a strategic opportunity: development maturity itself can become an interconnection advantage.

04 | DATA CENTER / MISSION CRITICAL

Pennsylvania 2 GW Project Phoenix Shows What an Energy-First Campus Looks Like

Aligned Data Centers broke ground September 10 on Project Phoenix, a planned 2 GW data-center campus in Shippingport, Pennsylvania.

The three-facility development is expected to anchor approximately 10 billion dollars of regional investment. But the more significant element may be its power architecture.

According to Aligned, the campus will rely on a dedicated onsite power source rather than the local electrical grid. The site sits adjacent to the former Shippingport coal-fired power facility, which is being redeveloped into an advanced natural-gas energy campus. Aligned says the completed energy development is also expected to provide excess capacity back to the PJM system.

The development also uses closed-loop cooling designed to require no operational water consumption beyond its contained system, another increasingly important consideration for large campuses.

This is exactly the type of development model the market is beginning to produce. The project is not simply a data center with a power solution attached. It is a digital-infrastructure development organized around an energy site.

Developer Takeaway

Legacy energy sites may become some of the most valuable digital-infrastructure sites in the country. They can potentially combine characteristics that are increasingly difficult to assemble independently: existing energy infrastructure, fuel access, transmission proximity, industrial zoning, large parcels, skilled workforce and an established community identity around infrastructure.

That does not make every retired power plant a data-center opportunity. But it changes the way developers should evaluate brownfield energy assets. The highest-value asset may no longer be the former generation plant itself. It may be the infrastructure ecosystem surrounding it.

05 | ENERGY INFRASTRUCTURE

Storage Demonstrates a Different Kind of Speed-to-Power

SMT Energy, FlexGen and Irby Construction announced September 9 that they completed commissioning and energization of the 160 MW SMT Houston IV battery storage facility in ERCOT in six weeks.

FlexGen says the commissioning timeline was approximately three times faster than originally planned, using preconfigured and laboratory-tested systems followed by accelerated field commissioning.

The project does not mean a 160 MW battery plant can be fully developed from greenfield site to operation in six weeks. The announced timeline relates specifically to the commissioning and energization phase.

But the accomplishment still demonstrates an important advantage of modular energy infrastructure. Once development, interconnection and procurement have been resolved, standardized systems can sometimes move through final deployment much faster than conventional generation or transmission infrastructure.

Developer Takeaway

Battery storage will not replace the sustained energy requirements of a gigawatt-scale AI campus. But its role within the architecture is expanding.

Storage can provide power quality, peak management, grid services, generation integration, transient-load buffering and potentially support more flexible interconnection arrangements.

For developers, the question should increasingly be not whether the project needs batteries, but what specific problem storage is being asked to solve.

07 | CAPITAL & DEAL FLOW

Vantage Raises 2 Billion Dollars for Development Before Construction

Vantage Data Centers announced September 14 that it closed a 2 billion dollar financing facility specifically supporting early-stage development across its North American platform.

The five-year revolving facility initially includes three development assets and allows additional projects to be contributed over time. Vantage describes the structure as a development and warehouse facility designed to provide committed capital before projects move into later-stage construction financing.

That distinction matters. The extraordinary capital requirements of AI infrastructure are forcing financing structures to move earlier into the development cycle.

Capital is increasingly needed not simply for buildings and servers, but for land, utility deposits, interconnection work, substations, equipment reservations, engineering, permitting and site infrastructure before traditional construction financing becomes available.

Developer Takeaway

Large-scale development increasingly requires a capital platform, not simply a project loan. Developers capable of repeatedly advancing sites through the expensive preconstruction period may have a meaningful advantage over competitors dependent on financing each asset independently.

This changes what institutional investors are funding. They are not only financing stabilized infrastructure. They are increasingly financing the development machine that produces the infrastructure.

08 | THE INTERCONNECTION DESK

PJM

The proposed large-load ride-through requirements were scheduled for further discussion at a dedicated Planning Committee education session. PJM expects proposed tariff solutions responding to the FERC June large-load order to be filed in November. Nothing has been filed or approved to date.

The significance extends beyond PJM. If large computational loads are required to meet defined voltage and frequency ride-through standards, facility electrical performance will become a formal part of grid integration.

ERCOT

Batch Zero verification RFIs are now active for the majority of conditionally accepted projects. ERCOT has also developed a separate Community Impact RFI for data-center facilities requesting interconnection at 25 MW or greater.

That signals that the Texas large-load process is expanding beyond pure electrical engineering into project credibility and community impact.

NERC

The NERC Large Loads Working Group was scheduled to consider two proposed Standard Authorization Requests: one addressing computational-load loss in planning and operating studies, and another addressing computational-load event reporting, model validation and model quality. A Standard Authorization Request is the first step in the standards process, not an approved standard.

NERC also hosted a two-day data-center load-modeling workshop covering standardized computational-load models and their use in stability studies. This is another indication that data-center electrical behavior is moving from an emerging concern toward formal reliability engineering.

CAISO

California is also progressing its Large Loads Initiative. CAISO plans to publish its draft final large-load proposal and draft tariff language on September 24, followed by an October 1 stakeholder meeting before eventual Board consideration and a FERC filing.

The direction across markets is increasingly consistent. Large-load interconnection is becoming more structured, more technical and less tolerant of speculative development.

09 | ON OUR RADAR

The DOE EO 14421 Webinar

The DOE session should provide the first meaningful indication of how the agency is thinking about equipment scope, supplier risk, prequalification and mitigation under the new bulk-power security framework. Written responses to the RFI remain due October 9.

NERC Computational-Load Standards

The importance of the current NERC work may be easy to underestimate. Formal event reporting, modeling and study requirements could ultimately influence how hyperscale facilities are designed across every major U.S. grid region.

Brownfield Energy Sites

Project Phoenix reinforces a development thesis worth watching: retired power sites may increasingly be reborn as digital infrastructure because the underlying energy, industrial and transmission characteristics remain valuable even after the original generation asset disappears.

Development Capital

The Vantage facility shows institutional capital moving further upstream. As power deposits, long-lead procurement and infrastructure studies increase preconstruction costs, access to development capital may increasingly separate credible gigawatt projects from speculative ones.

THE INTERFACE VIEW

Over the first three issues of Infrastructure Intelligence, a progression has emerged.

First: the data center business is becoming the power business. Then: interconnection readiness is becoming development readiness. This week adds a third principle: electrical behavior is becoming part of development responsibility.

At sufficient scale, a data center is no longer passive infrastructure. Four gigawatts of compute load disappearing from a power system can affect frequency and voltage. Two gigawatts of new demand can require an entirely new generation campus. A transformer can become a national-security issue because of who manufactured its components or controls. A queue position can lose value because the project behind it cannot survive verification. And billions of dollars of capital may be required before construction begins simply to make a project executable.

This changes the definition of development. The emerging infrastructure stack is not land, then building, then power. It is increasingly:

Land + Power + Grid + Generation + Controls + Equipment + Capital + Community + Execution

Those elements have to be developed together. The firms that understand that integration will be in the strongest position to convert todays extraordinary demand into actual operating infrastructure.

Because the market is beginning to draw a much sharper distinction between two things: projects that need power, and projects that are ready for power.

That distinction may define the next phase of infrastructure development.

Interface Holdings and Development Firm

Building the Future of Infrastructure Through Strategy, Capital, and Integration.