Data Centers – Duane Morris Energy and Environmental Blog

February 19, 2026February 19, 2026 by Brad A. Molotsky

NJ Bill A-7961R Directed at Large Electricity Consumers, Including Data Centers

The New Jersey Assembly has joined a growing list of legislative bodies nationally that are taking a look at and working on legislation to attempt to make larger users, including data centers, responsible for some of the cost of continued increasing rates that are currently being borne by residential customers. In other words, various legislative bodies, including New Jersey, are drafting and reviewing bills, like A-7961R (the “Bill”), that seek to create a separate tariff that will apply to large energy consumers, separate from the rate that will apply to a typical residential consumer. The stated goal of the legislation is to seek to hold large energy consumers responsible for the increased cost of electricity that is attributable to their desired need and use of electricity.

Read Brad Molotsky’s full analysis of the bill on the Project Development/Infrastructure/P3 Blog.

February 11, 2026February 11, 2026 by Duane Morris

Data Centers – Virginia Senate Bill 253 Targeted at Large Electricty Users

Earlier this week, the Virginia Senate proposed SB 253 – “The Fair and Affordable Electric Rates Reliability Act.” This bill joins other states that are looking for solutions to ever-increasing electric bills and that are targeting data centers as the perceived party that is causing the rate increases.

It is a bit too early to tell if SB 253 makes its way through the legislature, but it is indicative of approaches being considered and acted upon by various states. SB 253, which is supported by Dominion Energy (a large power generator in Virginia and beyond), would shift the way certain large consumers pay for electricity. Dominion Energy is a power supplier and creates its own energy at the power plants it owns and controls, but then goes to the open market to buy electricity from the grid at auction for any excess capacity it needs and then allocates these excess costs to its customers who use the electricity.

Read Brad Molotsky’s full analysis of the bill on the Project Development/Infrastructure/P3 Blog.

January 10, 2026January 10, 2026 by Brad A. Molotsky

Data Bytes – Data Center Marketplace Deals and Happenings

As part of our ongoing effort to focus on issues, incentives, acquisitions, joint ventures and the general comings and goings on in the data center arena, we thought it might be helpful to our readers to summarize some of the incredible deals that are occurring in the general data center marketplace.

While far from novel as we are aggregating stories of interest, given the speed and volume of deals, we hope that our quick overview of transactions might be helpful to those interested in learning more about the data center marketplace. If any of the stories pique your curiosity, feel free to email us and we will be happy to share information on the applicable article so you can dive deeper.

In no particular order, we saw the following:

Georgia – saw a $3.7 Billion-dollar data center proposed in Spalding County, Georgia;
Texas – saw a $1.5 Billion-dollar data center proposed in San Morcos, Texas;
Mississippi – saw Elon Musk’s XAI to invest over $20 Billion-dollars in a Southaven, Mississippi data center project;
Illinois – saw Hut 8 move to obtain zoning approvals on a $5 Billion-dollar data center in Logan, Illinois;
Europe – GTR obtained $2 Billion-dollars from KKR and Oak Hill Capital to expand their data center presence in Europe;
Capacity – estimates were issued showing data center capacity growing to over 200 Giga Watts by 2030, a massive increase;
Ohio – saw a $1 Billion-dollar, 500,000 SF data center being proposed in Scioto County, Ohio;
Pennsylvania – saw a $15 Billion-dollar, 16-building, 700-acre complex proposed in Carlisle, Pennsylvania;
Michigan – saw a $1 Billion-dollar data center proposed by Microsoft in Lowell Township, MI;
Google’s parent company, Alphabet, announced plans to acquire Intersect, a data center and energy infrastructure solutions company;
Capacity – data centers represented 40% of the PJM power capacity costs at the last PJM auction;
Washington, DC – Bisnow is hosting their National Datacenter – Construction Design, and Development conference in Washington, DC on February 18, 2026 – 7:30 EST; and
Iowa – Meta announced a purchase of a 328- acre site in Davenport, Iowa that is likely to be the home of a large data center.

The Quantitative/Qualitative Corner: This, friends, is like one week’s worth of deals – yes, a fast moving, large dollars being discussed and spent type of hyper frenzied marketplace. Our goal here is to continue to share deals in the space and where they are happening and we will share structure, power supply and financing strategies as the year progresses for those interested.

Duane Morris has an active team of lawyers who have been engaged in the review and dissemination of data center, digital infrastructure, real estate and incentives related alerts, blogs and advice on various topics. Please see our website for a few list of all available articles and blogs.

If you have any questions or thoughts, please contact Brad A. Molotsky, Robert Montejo, Darrick Mix, Paul Josephson or any of the Duane Morris lawyers you regularly engage with.

December 3, 2025December 4, 2025 by Brad A. Molotsky

Data Centers – Take Aways from Episode 1 of Our What’s Watt Series

I had the pleasure of hosting our inaugural kick off webinar entitled “What’s Watt – Major Trends in Data Centers and Digital Infrastructure” yesterday. We will be hosting a series of discussions during 2026 focusing on the incredible evolution and proliferation of data centers in the US and beyond, and the unique issues and opportunities that they are.

I was joined yesterday by two fabulous panelists: #Jeffrey Ginsberg, Managing Director at #DigitalBridge and #Robert Montejo, Partner, #Duane Morris who focuses his practice in the data center arena.

Our discussion focused around defining where primary markets and secondary markets in the US are located, what rents and vacancy rates currently exist, what the drivers of development have been and currently are, and what the outlook for 2026 is from our panelists’ perspective.

Primary and Secondary Markets – Historically, the primary market areas for data center development have been Northern California (3,500 MW), Phoenix (680 MW), Chicago (690 MW), Northern Virginia (3,450 MW), Atlanta (1,270 MW) and Dallas (860 MW). Secondary markets have developed in Los Angeles, Hillsboro, Oregon, Salt Lake City, Denver, Austin, Houston, Minneapolis, Boston and the New York/Northern NJ/Connecticut markets.

Rental Rates; Vacancy Rates – Currently, but expanding daily, the primary markets accounted for approximately 8,160 Mega Watts (MW) in 2025, up 17.6% from the second half of 2024. Vacancy rates in these primary markets are under 2% with pricing of $250-$500 per kilowatt of power provided. ¹ Note, these are NOT really real estate prices, rather, pricing is based on the amount of power one is able to provide to the data center, with larger scale developments of over 10 MW getting rental premiums of over 15% above the rates noted above.

By way of example of the increased pace of development, Northern Virginia saw an increase of 80% of its capacity in 2025 with over 2,000 MW coming online in 2025, together with another 538 MW currently under construction with a 2026 delivery date. Construction is estimated at approximately 5,300 MW in the primary markets, a bit down from 2024 construction.

As one would expect, the data center electric load usage has tripled over the last ten years and this usage is estimated to triple again by 2028 according to the US Department of Energy Lawrence Berkeley National Labs.

Historically, the initial growth in datacenters from 2016 through 2021 was driven by the desire/need for cloud computing facilities that were a bit geographically driven with facilities being on the smaller side. Given the relatively recent emergence of Artificial Intelligence, the location and sizing of data center deals has shifted radically to much larger, bigger, more intensive buildings and projects, with more and more over 100 MW hyper-scalers becoming more the rule than the exception.

Key Concerns/Risk: When asked about key concerns, Jeff and Rob indicated that power availability/grid capacity to deliver necessary power to run their operations, capital (given the immense cost of building some of these buildings – e.g., a 1 Giga Watt development potentially costing over $18 Billion to design, build and open) and NIMBYism were the top 3 on their list, followed by water for coolant, city and county desire to accommodate the use and local utility capability to delivery transmission lines when they say they will, being the next tier of concerns. States have begun to respond to citizen concerns about datacenters creating increased water and electric costs and are beginning to consider direct taxation via feed in tariffs on the data center users, requiring users to create their own power on site or requiring them to feed excess power back into the grid. Jeff reminded the audience that having a signed lease with an off taker/user is table stakes for these transactions given the immense size of the overall deal and that often the owners form joint ventures to de-risk their piece of the transaction.

Utilities: We discussed that while #Small Modular Nuclear Reactors (SMRs) are getting a lot of press, for the most part, current development of data centers have not utilized this technology yet. Most data centers are relying on a natural gas-powered energy source which is matched with a solar or wind renewable source with battery storage enabling the facility to have a redundant source of power, some of which can be put back on the regional grid if needed.

Locational Support or NIMBY: Various states and municipalities are becoming more anti-data center in their approach to resource management, permits and consumer costs, and, as such, it behooves the developers to find a way to stay on top of these shifts in desires (e.g., construction and permanent jobs vs. potential drain on resources and cost increases to other consumers). Others, like the federal government who just announced a $50B transaction to provide data centers for the federal government continue to seek ways to expand their involvement in the data center arena.

If this topic is of interest to you, please look for future datacenter discussions in 2026 where we will be focusing attention on financing for data centers – who is lending, where and what are the constraints; Technology that is going into datacenters – switchgear, Indoor Air Quality sensors, cooling devices that are avoiding water usage, etc.; Conversion of existing corporate data centers into newer facilities providing more capabilities; Private Equity Players in the space and what they are doing and looking for by way of returns; Hyper Scalers – who are they and do they own, lease, do both and why.

If you have additional topics you would like to see us explore, feel free to drop me a note at bamolotsky@duanemorris.com and we would be happy to add it to our growing list of things folks are asking for information about.

Duane Morris has a robust industry facing Energy and Environmental Group focused on incentives, regulatory, permitting, financing and development of energy projects and data center projects internationally including renewables, solar, wind, geothermal and power purchase agreements. The data center team has been working in the space for over 9 years on millions of SF on various deals, financings, developments and incentive arrangements. If you have any questions or follow ups, please do not hesitate to contact Brad A. Molotsky, Robert Montejo, Veronica Law, Ben Warden, Brad Thompson, Phil Cha, Shelton Vaughan or the lawyer in the firm whom you normally deal with on other matters.

Note as there are 1,000 kilo watts in a mega watt (MW), if the facility was 10 MW, this would equal 10,000 kilo watts x on the lower end – $250/kw = $2,500,000. Using some rough math, the 10 MW datacenter would be considered rather modest and contain approximately 4,000 racks in such a facility. ↩︎

October 29, 2025October 28, 2025 by Duane Morris

States Contend with the Proliferation of Data Centers Across the East Coast

By Anna Rendell-Baker

As data center projects proliferate in the United States to meet the growing demands of IT housing infrastructure, particularly in the face of rising AI usage, energy demands rise (and are expected to continue to grow), but so do the potential investments. Data centers are particularly energy-hungry, and the states are responding.

In Pennsylvania, Senate Bill No. 939 (the Artificial Intelligence and Data Center Act) was introduced on July 14, 2025. The Artificial Intelligence and Data Center Act establishes a state Office of Transformation and Opportunity and creates a regulatory sandbox program to allow for testing of data centers and high-impact data centers (a data center with a critical IT load of 50 MW or higher). If approved, tech companies would be able to temporarily test AI and data center technology with fewer approvals through fast-tracked permitting and the promise to keep municipal governments at bay on imposing strict local guidelines. Senate Bill No. 939 is currently with the Pennsylvania Senate Communications & Technology Committee.

In Delaware, Senate Bill 205 was introduced in late September to require any person or entity to begin the business of using 30 MW or greater of electricity to first obtain a Certificate to Operate (COP) from the Delaware Public Service Commission (DE PSC). On October 15, 2025, on the heels of Senate Bill 205 in Delaware, the DE PSC approved an order to open a docket to “address concerns regarding increased electric transmission and distribution costs to existing ratepayers and reliability concerns… namely for customers that will use a monthly maximum demand of 25 MW or greater” in the Delmarva Power & Light service territory and noted that these customers “need to be treated as a separate class within the current rate structure…” Docket No. 25-0826, Order No. 10826 (Oct. 15, 2025). Until a tariff is in place, interconnection of any large load customers will be paused.

In the same DE PSC meeting where Order No. 10826 was approved, the DE PSC noted the issue of data centers requiring a tremendous amount of power, while the rate of growth for new generation is relatively slow due to supply chain constraints, logistics and permitting. The DE PSC recognized that centers in the PJM footprint, even Virginia, could and likely would impact the state of Delaware. Senate Bill 205 awaits consideration by the Senate Environment, Energy & Transportation Committee.

On October 24, 2025, a New York State Bill (Senate Bill S8546) was introduced that would require the Public Service Commission (NY PSC) to establish a grid modernization surcharge on utilities for energy use of data centers. A data center would be considered any IT load exceeding 10 MW of demand. A high-intensity data center would mean a data center with an annual power-usage effectiveness greater than 1.3 or an annual electricity consumption greater than 50 gigawatt-hours. The surcharges would be put into a “grid modernization fund.” If Senate Bill S8546 were to go through, the NY PSC would then likely open a docket to establish specifics as to the surcharge and its application.

Meanwhile, in New Jersey, Governor Phil Murphy conditionally vetoed legislation, S-2493, on October 20, 2025, that would require the owners or operators of data centers to submit water and energy usage to the New Jersey Board of Public Utilities (BPU). Disagreement ensues on the potential delay of the bill, where reporting would have originally been required within six months of the bill’s signing. The governor’s conditional veto would extend the required reports to January 2027. Instead, the governor recommended that the New Jersey Legislature amend an existing law (P.L.2025, c.98), which directs the BPU to study the data centers’ effects on electricity costs for New Jersey residents and evaluate the potential for a tariff. On the reporting requirements of S-2493, the governor suggested deferring to the BPU to decide whether such reporting would be necessary in the future.