➤ The Signal
The constraint is migrating from megawatts to municipal and state policy.
Jurisdiction risk is now a first-order underwriting input for digital infrastructure.
For two years the data-center question was purely physical: can you get the power? July’s developments add a second gate that is political. Virginia — the largest U.S. data-center market — now taxes consumption directly, and a California city has shown that voters can simply ban the use outright.
FERC’s show-cause orders complete the picture. When the federal regulator tells the six largest grid operators to justify or rewrite how they handle gigawatt loads, the rules of interconnection themselves are officially in flux.
The underwriting consequence is concrete. A consumption tax hits operating margin every month; a rezoning or ban risk hits the land basis and the entire development premise. Both belong in the model now.
The structural read: capital chasing AI infrastructure is abundant, but the list of jurisdictions willing to host it is starting to shrink. Scarcity is shifting from power to permission.
➤ Implications
Powered land is necessary but no longer sufficient — political durability of the jurisdiction is the new diligence item. Markets that stay welcoming will command a premium; hostile ones will strand entitled sites.
Key Takeaways
- “In data centers, the next moat isn’t a substation — it’s a jurisdiction that still wants you.”
- “Source: Data Center Knowledge · FERC · AI Consulting Network — July 2026”
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