Capital · United States

Voltus's $225m round is a bet that flexibility can help data centers get connected

Credited to Rackline · Rachel Okonkwo · voltus.co · 9h ago

Photograph · Rackline · Rachel Okonkwo

The data center buildout has a power problem that money alone has not solved: getting new load onto a crowded grid. Voltus's $225m Series D, announced on Oct. 8, is a sign that investors now see a business in a different answer. Rather than wait for new plants and wires, a data center operator pays for flexible capacity that already sits on the grid, in batteries, cooling systems and industrial processes at homes and businesses, and brings it to the table as part of its case to connect.

The round was oversubscribed. Generation Investment Management led, with Activate Capital and Vitol as co-leads, and Broadscale Group, Climate Investment, NGP, Ajax Strategies and All Aboard Fund also invested. Voltus did not disclose a valuation.

The money is aimed at Voltus's Bring Your Own Capacity programs, faster battery deployment and hiring, according to Wilson Sonsini Goodrich & Rosati, which advised Voltus on the deal. Bring Your Own Capacity, launched last year, lets large power users such as AI hyperscalers bring flexible capacity of their own to help get their data centers connected. The hyperscaler pays. Voltus enrolls equipment at homes and businesses, cuts demand when the grid needs it and pays the participants.

Voltus and Google have set this against what their June release called an "asset-heavy approach," "spending years and billions of dollars expanding the grid to handle short periods of peak demand." Here the new load funds capacity first, drawn from customers already connected, and the payments go to those customers.

The backers' own statements make the thesis plain. "As electricity demand rises, the fastest, most cost effective and lowest-carbon source of new capacity is often the one already connected to the grid," said Dave Easton, a growth equity partner at Generation Investment Management. Raj Atluru, managing partner of Activate Capital, an existing backer, said: "Flexibility is the fastest and cheapest capacity the grid can add." He added: "Voltus is the best solution we've seen to the challenge of interconnecting large loads and decarbonizing our energy system while keeping retail rates affordable."

The mix of investors matters as much as the quotes. A growth equity fund, an existing backer and Vitol, which describes itself as "one of the largest power traders in the US," are underwriting the same model. Voltus said the round drew investors "across energy security, economic development, sustainability, and AI infrastructure." For a capacity product that has to be bought, dispatched and settled in power markets, a trader on the cap table brings what R. Andrew de Pass, head of energy transition investments at Vitol Inc., called "a deep understanding of market dynamics."

The model has two named commercial deals behind it. In June, Voltus signed a three-year agreement with Google to gather up to 100 megawatts a year of accredited distributed capacity in PJM, the largest US grid operator, into a Google-funded virtual power plant. Voltus pays the homes and businesses that take part. Michael Terrell, Google's global head of advanced energy, called it "a first-of-its-kind model for unlocking capacity to meet new data center growth." In August, Sunrun agreed to supply capacity from a portion of its residential solar-and-battery systems in PJM and MISO for Voltus's hyperscaler agreements.

Voltus has also moved to build supply. In June it acquired Brightfield AI, a battery project development company, on undisclosed terms, to speed up storage deployment.

Google is pursuing flexibility on more than one front. Alongside the Voltus deal, it has said it is making its own data center demand more flexible to unlock 1 gigawatt of demand response capacity through agreements with multiple utilities. Terrell called the Voltus deal an addition to "a growing toolkit." For investors, that suggests at least one of the largest buyers sees flexibility as a tool to use alongside, not instead of, conventional supply.

The numbers set the scale of the bet. Voltus says it expects to grow its platform to 20 gigawatts by 2030 as it rolls out Bring Your Own Capacity in PJM and MISO and expands across the US and Canada. The one contract with a disclosed size is up to 100 MW a year. The gap between the two is what the new money has to close.

None of the announcements says how much sooner a data center connects because it brought capacity, or what a hyperscaler pays per megawatt. Those are the figures that will decide whether the model works at scale, and the next contracts are where they will show up, if they are disclosed.

The demand backdrop is not in question. Voltus cited the North American Electric Reliability Corporation's forecast that peak demand will grow 24% over the next decade, "more than double the growth it forecast two years ago." Dana Guernsey, Voltus's chief executive, framed the task as speed: "The question is no longer whether the grid needs flexibility, it's how quickly we can make it foundational."

For investors tracking the space, the practical read is that flexibility is being sold not only into power markets but to data center developers who need to connect, and the money is following that buyer.

PolicyUnited States

Florida counties cite state law on local control as data center moratoriums spread

Credited to Rackline · Claire Fontaine · mymanatee.org9h ago

Useful

A Florida county has stopped taking applications for data centers and other big power users for a year, pointing to a new state law that confirms counties' control over where such projects go. The law creates no moratorium. But Manatee County's use of it, echoed in drafts elsewhere in Florida, shows local pauses on data center development becoming a standard planning tool.

The Manatee County Board of County Commissioners adopted Ordinance 26-42 on Oct. 8 after its second and final public hearing. It halts the "submission and acceptance of applications" for building permits, site plans, development orders, development agreements, special permit uses, rezonings and comprehensive plan amendments related to "data centers, large-scale data centers and other large load customers" in unincorporated Manatee County. It runs 12 months or until the board repeals it, and the board can extend it.

The reach is the point. The board's July 28 motion, as the county's business impact estimate describes it, covered "data centers and other large-load customers or facilities with substantial electrical, water, wastewater, or other utility demands." "The moratorium does not mean data centers have been permanently prohibited in Manatee County," the county said.

Manatee cited Chapter 2026-65, Laws of Florida, signed May 7 as Senate Bill 484. It says data centers and other large load customers "may present unique planning, infrastructure, and compatibility considerations" for local planning rules to address, and that local governments "shall maintain the authority" they already hold over such customers. It never mentions a moratorium. Manatee's ordinance rests on the county's home-rule powers and cites the law as confirming them.

Two provisions do give local zoning more weight. A large load customer, 50 megawatts or more at one site, "may not be considered an electric substation" under state siting law, which makes substations a permitted use in almost every zoning district. And state water regulators may not issue a water-use permit to a large-scale data center if the use is "prohibited by the applicable local government zoning regulations and comprehensive plan." Utilities also had to file large-load tariffs by Oct. 1 designed to make each such customer bear "its own full cost of service."

Others are borrowing the language. St. Johns County, near Jacksonville, put on its Oct. 6 agenda the first presentation of an ordinance freezing discretionary approvals for data center projects of 5 MW and up for about a year. The draft says it is "adopted for planning purposes in response to Chapter 2026-65." The county had scheduled a public hearing for Oct. 20, but the item is not on the board's posted agenda for that meeting. Panama City adopted Ordinance 3313, a one-year pause on large-scale data centers, on Sept. 22. Its findings say the law "expressly recognizes and preserves local government authority."

Outside Florida, the pauses that matter most to investors reach real projects.

In Salem, Ore., the city council adopted Resolution 2026-40 on Sept. 21 by a 7-0 vote, with two councilors absent. It bars the "construction and development" of data centers until Jan. 19, 2027, unless extended. It covers every data center that is a primary use and any accessory data center with more than 2 MW of capacity and a power usage effectiveness above 1.5. It lands on Verrus, whose subsidiary filed a land-use application on July 31 for Oakline at Mill Creek. The city, which puts the investment at more than $5 billion, deemed the application incomplete on Aug. 28. The city chose a pause, its findings say, because new rules "would likely not apply to pending applications."

In Gilroy, Calif., the council unanimously approved on Sept. 14 a 45-day urgency ordinance, extendable to two years, that stops the city from accepting, processing or approving applications for new data centers. The city has a pre-application from Amazon "for a possible second facility," and any formal application would fall under the moratorium. Amazon's data center already under construction in northeast Gilroy is not affected. On Monday, Oct. 19, the council considers extending the pause by 10 months and 15 days, through Sept. 3, 2027.

In Thornton, Colo., the city council voted 5-3 on Sept. 22 to pass on second reading an ordinance pausing the "submission, acceptance, processing, or approval" of applications for new or expanding data centers.

States are moving too. New York Gov. Kathy Hochul's Executive Order 62, signed July 14, holds in abeyance applications for discretionary state environmental permits for data centers of 50 MW or more until the Department of Public Service finishes a statewide environmental impact statement. It sets no end date and doesn't reach local permits. On Sept. 17 the Public Service Commission, in Case 26-E-0045, ruled that the statement is required and released its draft scope for comment by next Tuesday, Oct. 20.

In New Jersey, two bills have been introduced; neither has passed. S4659, introduced Oct. 1, would bar construction and state or local permits for data centers with 25 MW or more of computing load until 90 days after a state environmental study due within 15 months. A5482, introduced Sept. 14, would stop approvals, subsidies and tax incentives for artificial intelligence data centers over 10 MW for six months. Texas Gov. Greg Abbott's Sept. 21 order halting state environmental permits for data centers is a separate development.

Each local pause is temporary and framed as a step toward rules, not a ban. The form matters for developers. A pause on accepting applications, as in Manatee, Gilroy and Thornton, stops a project before it enters the queue; Salem's targets construction and development, catching a project already in the pipeline. And a year spent rewriting a land code can easily stretch once the new rules must be adopted.

Source · mymanatee.org

Front Method

Capital · United States

New York grid operator sets Oct. 21 vote on data center rules that cut off flexible loads at $200 a megawatt-hour

Credited to Rackline · Michael Anderson · nyiso.com · 9h ago

Photograph · Rackline · Michael Anderson

New York's grid operator will ask its members next Wednesday, Oct. 21, to approve rules setting how data centers and other big power users connect to the state's grid, and on what terms. Loads that don't bring new generation or pay for grid upgrades could be offered only interruptible service, cut off whenever power at their location costs $200 a megawatt-hour or more.

The New York Independent System Operator had planned to split the votes between its Business Issues Committee on Oct. 14 and its Operating Committee on Oct. 15. Neither committee's agenda for this week's meetings included the item. NYISO's Oct. 7 materials instead set a joint presentation and vote for both committees on Oct. 21, and its calendar lists a special joint session that day. The Management Committee votes a week later, on Oct. 28. If members and NYISO's board sign off, NYISO plans to file the rules with the Federal Energy Regulatory Commission on Nov. 16.

That deadline comes from Washington. On June 18, FERC ordered NYISO and the state's transmission owners to show why their rules for large and co-located loads remain just and reasonable, in Docket No. EL26-69. NYISO asked on Aug. 3 for a 90-day pause to write its own rules with stakeholders. FERC granted it on Aug. 14, saying the process would give NYISO, the transmission owners and others "an opportunity to consider region-specific solutions." Responses to the order are now due Nov. 16.

The queue explains the urgency. FERC's June order cites NYISO figures showing six large-load projects totaling 1,045 megawatts in the queue in 2022, against more than 40 projects that could add more than 10,000 MW as of November 2025. NYISO's Oct. 7 transition plan puts about 3.6 gigawatts of projects far enough along to be grandfathered, and 9.8 GW more that would go through a one-time transitional study. Both figures are preliminary.

Under the proposal, a large load is a commercial or industrial site with peak demand of 50 MW or more on the state's transmission system. Sites within two miles of each other and in the same capacity region count as one. A separate "Computational Large Load" category covers data centers used for AI training and deployment, cryptocurrency mining and other computing. Loads in service before June 18 come under the new rules only if they grow by 50 MW or more or change how they operate.

New projects would go through a study cycle NYISO calls Large Load Integration Procedures, starting with a 90-day resource adequacy review and a 90-day system impact study. The first regular cycle would begin in the third quarter of 2027. Applicants pay a $10,000 nonrefundable fee, a study deposit of $100,000 to $200,000 depending on size and, to reach the final assessment, a refundable readiness deposit of $4,000 per MW.

The study results decide which service a load can take. A load that causes no reliability problems, or pays for upgrades and brings enough new capacity to cover its impact, gets Firm Withdrawal Service: the right to draw power regardless of price, subject to emergency procedures. A load offered firm service cannot choose non-firm instead.

Loads whose problems can be solved by flexibility get Non-Firm Withdrawal Service. Their bids are capped at $200/MWh, so they must stop drawing once the price at their node reaches that level. They must also follow out-of-merit orders from NYISO or the local utility, including orders to disconnect. NYISO says the cap "serves to prevent large loads from driving up LBMPs and mitigates the likelihood they will cause reliability issues." A single load can take a mix of firm and non-firm service.

NYISO's Sept. 22 market design added a third category, Zero Withdrawal Service. It covers all or part of a load that is served only by generation behind its own meter and has no right to draw from the grid. NYISO said it suits developers whose grid connection is too small for the whole campus, or who don't want to wait for their generator to clear the interconnection study. A co-located plant serving only that load would not need grid interconnection rights.

Non-firm and zero-withdrawal load is left out of New York's capacity requirement, so no capacity is bought for it. Instead, it pays a monthly System Reliability Benefit Fee based on its contracted kilowatts, the statewide capacity requirement and the monthly spot capacity auction price, however much energy it uses. The proceeds go to load-serving entities to offset capacity costs for existing customers. Without the fee, NYISO said, those loads "would receive the benefits of stable and reliable system operations without correspondingly contributing to costs incurred to maintain reliable system operations."

Generators that pair with a large load to earn it firm service face a 15-year commitment. Partner plants must be proposed projects in the same capacity region as the load, whether the rest of the state, the Lower Hudson Valley, New York City or Long Island, and must obtain capacity interconnection rights. If a partner or on-site plant is mothballed or retires before the 15 years are up, all or part of the load drops to non-firm service. NYISO would also exempt those plants from buyer-side mitigation, the rules that stop subsidized plants from undercutting capacity prices, because the new supply is meant to offset the load's own demand.

NYISO took comments on the draft tariff language through Oct. 9 and scheduled one more working-group session on the planning rules for Oct. 14. Its posted materials are still marked as drafts.