Exelon’s Data Center Pipeline Cut as AI Projects Face Pushback

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Or sign-in if you have an account.(Bloomberg) — Exelon Corp. slashed its forecast for new data center projects amid mounting opposition across the US to AI facilities.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe utility giant, which operates in the Mid-Atlantic and Midwest, lowered its pipeline of high probability data centers to 11 gigawatts, down from 18 gigawatts, according to the company’s second-quarter earnings presentation. The firm also cut its overall future pipeline through 2027 to 25 gigawatts, down from 43 gigawatts in the first quarter. “What this update reflects is we have now weeded out speculative projects, and it gives us proactive insight into what is real,” Chief Financial Officer Jeanne Jones said on the company’s earnings call.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe revision comes at a time when investor skepticism over the artificial intelligence spending spree is whipsawing markets and public outcry against data center projects is growing. Utilities, which once touted robust pipelines of hosting facilities, are now making efforts to prioritize the connection requests that are likely to come to fruition, while winnowing out projects at risk of floundering.The company describes its high probability pipeline as projects in advanced phases of design or backed by Federal Energy Regulatory Commission-approved transmission security agreements. Those pacts as well as Exelon’s cluster study process are aimed at removing data center projects unlikely to be realized or that fall short of the required collateral.RBC Capital Markets analyst Stephen D’Ambrisi blames regional opposition to new data centers and consumers’ fear of higher utility bills.“Making the bar much higher in order to connect to the grid is part and parcel of all of these ways in which utilities are trying to protect regular rate payers,” D’Ambrisi said in an interview. “You’re seeing pushback to data center development across the US, and so there are some level of projects that were probably high probability that may be falling out of the queue as well.”An Exelon spokesperson declined to detail the reasons some of the projects might be unfeasible, but said via email that “if a project chooses not to proceed because of those customer protections, this is evidence the framework is working as intended.” The lowered forecast contrasts with California utility, PG&E Corp., which raised its outlook during its second-quarter report. PG&E’s pipeline of proposed data center projects, which more than doubled from March to June, signals that the data-center boom is moving beyond the Mid-Atlantic and Texas, states that have dominated AI infrastructure so far.Meanwhile, the Electricity Reliability Council of Texas, the state’s grid operator, has begun to study interconnection requests in batches in order to get serious projects connected to power as quickly as possible. Under the plan, batch studies will take place every six months. To start, Ercot has dubbed the most advanced projects as Batch Zero, a pool of around 220 gigawatts looking for connection.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.