Largest US Data Center Project Ever Proposed Is Officially Dead
- QTS withdrew its Virginia Supreme Court appeal on July 2, killing the 2,100-acre, roughly $100 billion Digital Gateway campus for good.
- The retreat follows a March court ruling that voided the project's 2023 rezoning over a notice error, and lands days after Blackstone sold a majority stake in three other Northern Virginia data centers to Digital Realty.
- Blackstone's broader data center business is unaffected: it still manages more than $150 billion in digital infrastructure assets and just took its acquisition REIT public in May.
The largest data center project ever proposed in the U.S. is officially dead.
Blackstone-owned QTS Realty Trust withdrew its appeal to the Virginia Supreme Court on July 2, closing out a three-year legal fight over the Prince William Digital Gateway, a planned 2,100-acre campus in Prince William County, Virginia that would have packed 37 buildings and 22 million square feet of data centers next to Manassas National Battlefield Park. At full build-out, the project carried an estimated $100 billion price tag and would have been the largest data center complex in the world.
QTS was the last developer standing. Co-developer Compass Datacenters, backed by Brookfield, dropped its own appeal in April, and the Prince William Board of County Supervisors withdrew from the litigation the same month after spending nearly $2 million in taxpayer funds defending the original rezoning. That approval, granted in 2023, was voided by the Virginia Court of Appeals in March, which found the county's public notice for the rezoning hearing fell short of the state's six-day spacing requirement between newspaper notices.
In its withdrawal filing, QTS said the project had "advanced through years of planning, analysis, and public review" and would have delivered tens of billions of dollars in capital investment and thousands of jobs to the county. The company added that Virginia remains central to its business, pointing to $5 billion in ongoing investment in the Richmond region on top of its existing Northern Virginia footprint.
The retreat comes days after Blackstone agreed to hand Digital Realty full ownership of three built-and-leased Northern Virginia data centers valued at $7.8 billion, in a $3.5 billion cash-and-stock deal. That transaction extends an existing joint venture rather than an exit, but the timing puts fresh attention on how Blackstone is managing its data center bets in the state that hosts more capacity than anywhere else in the world.
Northern Virginia remains the industry's biggest hub, and the region's buildout keeps running into local resistance over land, water and grid strain. Several states have floated moratoriums or tighter permitting rules as utilities warn that data centers are driving an outsized share of new electricity demand, and grid operators in some regions have started asking developers to bring their own power generation rather than compete for scarce capacity. A Gallup survey released in May found 71% of Americans oppose data center construction in their area, with 48% strongly opposed, running higher than opposition to a local nuclear plant.
For Blackstone, the Digital Gateway collapse doesn't change the broader trajectory. The firm still manages a data center portfolio worth more than $150 billion globally, and in May it raised $1.75 billion taking its acquisition vehicle, Blackstone Digital Infrastructure Trust, public on the NYSE, to keep buying already-built, leased facilities tied to AI demand. What the Prince William outcome shows is that even the biggest players in the space can lose a fight over land use once local opposition organizes and the legal process runs its course.
By Charles Kennedy for Oilprice.com
As power grids become strained amid the latest US heatwave, residents of communities with data centers are being asked to make sacrifices in the form of cost, comfort, and potentially safety.
Drone image of the Markley Group data center within a residential neighborhood in Lowell, Massachusetts on May 12, 2026.
(Photo by Danielle Parhizkaran/The Boston Globe via Getty Images)
Stephen Prager
Jul 02, 2026
COMMON DREAM
The rise of global temperatures has made oppressive summer heatwaves an annual occurrence, and for many Americans, air conditioning is no longer optional.
But as scorching temperatures bear down on the US once again this week, affecting more than 250 million people across the country, some are suddenly being forced to share the precious cool air with data centers that have popped up in their towns to power the breakneck build-out of artificial intelligence technology.
Alarmed by ‘Rapid, Largely Unregulated Rise’ of AI Data Centers, 500+ Groups Demand Congress Pass Moratorium
To keep their massive arrays of computer servers cool, these complexes require large amounts of energy even in normal times. But during a heatwave, the demand becomes even greater.
As power grids become strained, residents of communities with data centers are being asked to make sacrifices in the form of cost, comfort, and potentially safety.
In Henrico County, Virginia, which has 37 data centers, thousands of county employees received an email last week from County Manager John Vithoulkas warning them that beginning on July 1, the rate paid by “government and school facilities will increase dramatically—by 25%, increasing costs by an estimated $5 million next fiscal year.”
“To mitigate the impact of higher electric costs, I am asking that we, collectively, make slight adjustments to conserve electricity across our individual workspaces,” he said in the email, which was obtained by 404 Media. “Turn off your lights when leaving your workspace, including when you leave for the day,” he continued. “Turn off your computers/laptops at the end of each workday. If your workspace has windows, adjust the blinds to manage heat from sunlight.”
He also informed them of the high cost of running “space heaters,” which Frank Landymore of Futurism.com suggested was a thinly veiled way of telling residents to turn down the AC, since nobody would be using space heaters in 100-degree heat.
It was a signifier of what’s happened across the entire mid-Atlantic grid, whose largest operator, PJM Interconnection, is experiencing record energy demand.
According to Reuters, the grid that supplies power to 67 million people has seen a roughly 1,000% increase in capacity prices since 2024 as a result of the AI boom, which is already being passed onto consumers in the form of higher bills.
To reduce the risk of outages caused by an overburdened grid, the US Department of Energy granted PJM the authority to require data centers to operate backup diesel generators.
Under the emergency order, Politico reported, data centers are allowed to produce enough diesel emissions that the Environmental Protection Agency (EPA) would categorize it as a “possible human carcinogen.”
The result has been what Shaolei Ren, a professor at the University of California, Riverside, told The Associated Press could be “a disaster for the local air quality” in communities with data centers.
In Lowell, Massachusetts, where a Markley Group data center sits in the working-class Sacred Heart neighborhood, residents told the AP that they were staying inside to avoid smelling the diesel fumes being belched up near their homes.
Public backlash led the Lowell City Council to vote unanimously for a moratorium on data center building in February. But many residents feel the damage has already been done, with the Markley center gobbling up their town’s electric and water resources.
One resident told The Harvard Crimson in May that since the center came to town, his winter electric bill has shot up from $40 to $177.
As temperatures spiked this week, more than 200 protesters flooded a local zoning meeting to voice their anger about the noise, pollution, and surveillance equipment bearing down on their homes. One 14-year-old girl was dragged out of the meeting by police officers.
“I’m not hurting anyone,” she shouted as cops escorted her through the exit. “We just don’t want data centers!”
Within roughly three years, data centers have come to consume about 4.5% of all electricity in the US, a number that is expected to keep ballooning in the coming years.
Even before the data center boom began, scientists had long warned that the climate crisis caused by human carbon emissions would make US heatwaves more frequent, longer, and more intense.
Heatwaves in major US cities are already three times as common as they were in the 1960s, according to an EPA report from 2024, and the average heatwave season is now 46 days longer.
The number of heat-related deaths in the US more than doubled from 1,069 in 1999 to 2,325 in 2023, according to a JAMA Network study analyzing mortality data from the Centers for Disease Control and Prevention.
With more than 1,500 data center projects currently underway across the US, a vicious cycle appears poised to accelerate.
The rapid buildout of data centers has already culminated in massive emission spikes. Amazon, which once pledged to reach net-zero emissions by 2040, saw its carbon output increase by 16% in 2025 in large part due to its multi-billion dollar data center buildout.
According to a report out Wednesday from the Environmental Integrity Project, at least 74 natural gas-fired power plants are being planned to power the industry’s expansion, which are expected to release 662 million tons of greenhouse gas—equivalent to the entire nation of Australia—per year.
Many of the plants are being built in low-income areas that already have poorer health outcomes and could produce nearly 160,000 tons of health-damaging pollutants that can cause lung damage, asthma, and heart attacks.
“In their wholehearted embrace of dirty and outdated gas power, data center developers are announcing to the public that they don’t care about us,” said Alex Bomstein, the executive director at Clean Air Council. “We deserve better than decades of toxic pollution, parched streambeds, and climate chaos.”
Power Prices Triple on PJM as Heat Wave and Data Centers Collide
- PJM demand hit roughly 163 gigawatts Thursday, just short of the grid's 20-year-old record, as the DOE issued its third emergency order of 2026.
- Wholesale prices spiked past $2,000/MWh and operating reserves fell to 5,091 MW, leaving PJM little cushion against an unplanned outage.
- PJM's own numbers show nearly all its demand growth through 2030 comes from data centers, and capacity costs have already jumped more than 11-fold.
America's biggest power grid pushed to the edge of an all-time record this week, and the bigger force behind it may be tied to data centers.
PJM Interconnection, which delivers power to 67 million people across 13 states and Washington, D.C., saw electricity demand surge to roughly 163 gigawatts on Thursday as a brutal heat dome pushed heat indices past 110 degrees from Washington to New York, according to Reuters. That fell just short of the grid's 2006 all-time peak of 165,563 megawatts, even after PJM had forecast Thursday's load could top 166,000 MW. Wednesday's preliminary peak hit 161,910 MW, among the highest readings PJM has ever recorded.
The National Weather Service has warned the dangerous heat will persist through the Fourth of July weekend, with heat indices reaching as high as 115 degrees in parts of the mid-Atlantic, per Utility Dive.
The U.S. Department of Energy stepped in Tuesday with its third emergency order of 2026, authorizing PJM to push power plants past normal pollution limits and, as a last resort, force large data centers onto backup generators during peak hours.
The order lets PJM direct any customer with at least 50 megawatts of peak load to switch to onsite backup power within 15 minutes of an emergency signal, freeing capacity for homes and hospitals. The DOE issued similar orders after a January cold snap and a May heat-and-maintenance squeeze.
“Maintaining affordable, reliable, and secure power in the PJM service territory is non-negotiable,” Energy Secretary Chris Wright said in a statement Tuesday.
Day-ahead power topped $2,000 per megawatt-hour in parts of the system Thursday, and the Western Hub benchmark settled at $1,222.75/MWh, according to power markets data firm Yes Energy, nearly triple where it stood during a comparable peak last summer. PJM's operating reserves, the cushion it keeps on hand for the unexpected, sank to 5,091 MW Thursday from 10,996 MW a day earlier, leaving little room to absorb a plant tripping offline.
During a comparable late-June peak this year, natural gas supplied 44 percent of PJM's generation, coal another 19 percent, nuclear 20 percent and solar just 6 percent, according to the U.S. Energy Information Administration.
PJM projects peak demand will grow by 32 gigawatts between 2024 and 2030, with all but 2 gigawatts of that increase coming from data centers, according to PJM figures cited by Canary Media. The buildout has already pushed PJM's capacity market, the mechanism that pays generators to guarantee future supply, to a record $333.44 per megawatt-day, up more than 11-fold from $28.92 just three auctions earlier. Independent market monitor Monitoring Analytics has tied 63 percent of that run-up to data center demand, a tab of roughly $9.3 billion now landing on ratepayers.
Utilities asked customers to help bridge the gap in the meantime…
Maryland's BGE and Potomac Edison told customers to raise their thermostats, grill outdoors instead of cooking inside, and hold off on running dryers and dishwashers until evening. PJM's 18 gigawatts of fast-start reserves held, and the grid avoided rolling blackouts. But the record it dodged this week is one it's now forecast to break soon enough, with or without a heat wave to blame.
By Michael Kern for Oilprice.com
- PJM demand hit roughly 163 gigawatts Thursday, just short of the grid's 20-year-old record, as the DOE issued its third emergency order of 2026.
- Wholesale prices spiked past $2,000/MWh and operating reserves fell to 5,091 MW, leaving PJM little cushion against an unplanned outage.
- PJM's own numbers show nearly all its demand growth through 2030 comes from data centers, and capacity costs have already jumped more than 11-fold.
America's biggest power grid pushed to the edge of an all-time record this week, and the bigger force behind it may be tied to data centers.
PJM Interconnection, which delivers power to 67 million people across 13 states and Washington, D.C., saw electricity demand surge to roughly 163 gigawatts on Thursday as a brutal heat dome pushed heat indices past 110 degrees from Washington to New York, according to Reuters. That fell just short of the grid's 2006 all-time peak of 165,563 megawatts, even after PJM had forecast Thursday's load could top 166,000 MW. Wednesday's preliminary peak hit 161,910 MW, among the highest readings PJM has ever recorded.
The National Weather Service has warned the dangerous heat will persist through the Fourth of July weekend, with heat indices reaching as high as 115 degrees in parts of the mid-Atlantic, per Utility Dive.
The U.S. Department of Energy stepped in Tuesday with its third emergency order of 2026, authorizing PJM to push power plants past normal pollution limits and, as a last resort, force large data centers onto backup generators during peak hours.
The order lets PJM direct any customer with at least 50 megawatts of peak load to switch to onsite backup power within 15 minutes of an emergency signal, freeing capacity for homes and hospitals. The DOE issued similar orders after a January cold snap and a May heat-and-maintenance squeeze.
“Maintaining affordable, reliable, and secure power in the PJM service territory is non-negotiable,” Energy Secretary Chris Wright said in a statement Tuesday.
Day-ahead power topped $2,000 per megawatt-hour in parts of the system Thursday, and the Western Hub benchmark settled at $1,222.75/MWh, according to power markets data firm Yes Energy, nearly triple where it stood during a comparable peak last summer. PJM's operating reserves, the cushion it keeps on hand for the unexpected, sank to 5,091 MW Thursday from 10,996 MW a day earlier, leaving little room to absorb a plant tripping offline.
During a comparable late-June peak this year, natural gas supplied 44 percent of PJM's generation, coal another 19 percent, nuclear 20 percent and solar just 6 percent, according to the U.S. Energy Information Administration.
PJM projects peak demand will grow by 32 gigawatts between 2024 and 2030, with all but 2 gigawatts of that increase coming from data centers, according to PJM figures cited by Canary Media. The buildout has already pushed PJM's capacity market, the mechanism that pays generators to guarantee future supply, to a record $333.44 per megawatt-day, up more than 11-fold from $28.92 just three auctions earlier. Independent market monitor Monitoring Analytics has tied 63 percent of that run-up to data center demand, a tab of roughly $9.3 billion now landing on ratepayers.
Utilities asked customers to help bridge the gap in the meantime…
Maryland's BGE and Potomac Edison told customers to raise their thermostats, grill outdoors instead of cooking inside, and hold off on running dryers and dishwashers until evening. PJM's 18 gigawatts of fast-start reserves held, and the grid avoided rolling blackouts. But the record it dodged this week is one it's now forecast to break soon enough, with or without a heat wave to blame.
By Michael Kern for Oilprice.com
