The biggest problem plaguing the AI infra buildout is uncertainty.
But unlike in most other ventures, this uncertainty is multi-faceted. More so than the Royal Asscher diamond.
For a hyperscaler or DC developer hoping to build a data center, it takes a long time to answer these questions (a sampler):
Will the site have enough power available on time, or will transmission bottlenecks delay the project?
Which power source to go for?
If they choose solar, they need batteries (added cost, plus battery packs suitable for data centers are just starting to get built) and/or fuel cells (relatively new in the game, and more expensive)
If they choose gas,
Is there a gas pipeline close to the site?
Will the gas turbine supplier be able to supply turbines on time? (GE Vernova is trying to add new turbine production capacity, which only comes online in 2028)
Will the gas plant get challenged due to environmental concers at a later stage? (PointOne recently announced it will consider fuel cells instead of the earlier proposed gas plant)
If they choose nuclear,
Where can they find a site with enough water for the data center and the nuclear plant?
Will the nuclear plant get built on time (~7-8yr construction period) and within budget?
What will be the landed cost of power per unit?
Even if a DC developer manages to get through all of these stages AND secure a commitment for power AND gets all its electric and equipment suppliers in line (very ambitious in a world where everything from switchgear, to substation transformers, to GPUs, to HVDC lines, and cooling systems are fully booked for the next 2 years), there can be opposition from the public on a) water use, b) the project pushing up consumer power prices and transmission costs, c) emissions and other environmental impact of the facility c) only big tech benefitting from setting up new projects - not enough economic benefits flowing to the community.
Pennsylvania’s HB2650 does not solve these issues. It cannot. But it requires a data center developer proposing a new project in the state to engage with them upfront, rather than get some approvals for the project and then have the project get stuck further down the pipeline.
In 2016, Pennsylvania first introduced a bill allowing data centers to get a tax refund on equipment used in the facility. From January 1, 2022 onwards, the state converted the post-facto refund into an upfront exemption. Data centers were exempt from sales and use tax on eligible equipment used in the facility.
HB2650 introduces new ‘GRID standards’ that developers must meet in order to retain the sales and use tax exemption benefit.
Developers must “Build, bring, or buy incremental electric capacity needed to meet its new energy demands”. This includes a minimum 10% of overall energy from clean sources from Jan 1 2027 onwards, going up to 32% in 2035. This must be clean and ‘firm’ energy. Transmission and other costs to bring the energy to the facility must also be borne by the developer.
New projects applying for the GRID certification must also submit a community outreach plan including a commitment to “consult with municipal leaders at a sufficiently early stage of the project to enable meaningful public input on key project design decisions directly impacting the public”
Meet a minimum threshold of economic incentives created for the state - $250 million cumulative investment, at least 200 jobs during the construction phase, at least 50 new jobs that pay 125% of the state-wide average, a plan to hire and train local workers
Developers must submit a sustainability plan, attempt to meet at least certification for environmental standards (such as LEED), and use backup generator that have either Tier 4 standards or prefer clean emissions-free storage
Where other states are introducing out-right moratoriums, or additional taxes on new data center projects, Pennsylvania is keeping the door open and hoping for a better proposal->commissioning ratio.
Telborg is tracking the US data center buildout, real-time, across all states.
We capture
New transmission, gas pipeline, energy infra builds
Market updates on the supply chain - substation transformers, gas turbines, HVDC lines, batteries
Regulations on data centers, including moratoriums, new incentives & standards
Project announcements and expansions, including approval grants and failures
Legal & community action in a specific project or state
We’re different from every other provider in 2 ways
a) all our intelligence is real-time - our backend works 24x7 to capture what’s happening right now
b) everything comes from a primary source - SEC filing, utility filings, PUC dockets, corporate press releases, investor reports.
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