HD Intelligence Desk · November 1, 2026

Schar's Letter, PJM's Refiling: State of the AI & Hyperscale Data Center Market — October 2026

Published November 1, 2026

What Happened

On October 19, 2026, TCEQ Interim Executive Director Steven Schar wrote Governor Abbott that the agency has paused issuance of all permits related to the construction or development of infrastructure directly supporting data centers, that staff are screening pending applications, and that, where possible, the agency is suspending claimed authorizations that do not require an affirmative permit. On October 9, FERC issued 197 FERC ¶ 61,019 in Docket No. ER26-3515-000. The order accepts a Large Load definition and a Large Load Registry, effective October 12, 2026, and rejects Interim Resource Adequacy Service, Bring Your Own New Capacity, the exclusion of Eligible New Large Load from the variable resource requirement curve beginning with the 2029/2030 delivery year, and the definition of New Large Load without prejudice. On October 29, PJM filed Docket No. ER27-330-000, accession 20261029-5227, amending Reliability Backstop Procurement. The Commission has not acted on that filing.

Why It Matters

Time-to-power is 35% of the grade. We hold ERCOT at A-. Market Notice M-B091426-01 still expects the state-and-community report by December 10, and it restates the August 3 directive holding advancement through interconnection until that audit is done. Schar's letter puts the same audit on the permit desk. Trend stays down. The same shock is not cut twice. We hold PJM at D. The 2027/2028 Base Residual Auction cleared 6,623 MW short of the reliability requirement, and the largest driver was 5,250 MW of forecast load growth, nearly 5,100 MW of it data centers. The 2028/2029 auction cleared 6,831 MW short. Order 196 FERC ¶ 61,245 still suspends Reliability Backstop Procurement to February 28, 2027, subject to refund. ER27-330 waits on a Commission order before a bid window opens. Trend stays down. We hold SPP at B+, MISO at C, and WECC at C+. The October docket sheets show no order in ER26-3685 or ER26-3650. CAISO's October 28 vote authorizes a filing. The California tariff is still ahead.

The permit desk

On October 21 the Texas Tribune reported that TCEQ said it had suspended specific data-center permits identified by watchdog groups, and that spokesman Ryan Vise said applications must be physically provided so staff can determine whether they are related to data centers. The STEERS page, checked November 1, says the State of Texas Environmental Electronic Reporting System is temporarily down so staff review all applications related to data centers, under the Governor's September 21 directive. The page says the agency is modifying the system so staff review an application before an authorization is issued, and that it anticipates the work will be completed in mid-November. The Multi-Sector General Permit TXR050000 renewal deadline is extended to Monday, December 28, 2026. The same page describes an episodic email waiver for the construction general permit, the multi-sector general permit, and the concrete production general permit when an applicant cannot wait for STEERS. Those are the named water permits. Data-center permit issuance stays paused on the October 19 letter. The community-impact responses were already due. Market Notice M-B091426-01 required complete RIOO responses, with a notarized developer attestation, by 5 p.m. CPT on October 12 from Batch Zero data-center loads conditionally classified as base or studied that have not energized at 60 kV or above, and from substantiated data-center load of at least 25 MW and under 75 MW. A miss is reported to the Public Utility Commission of Texas and the Office of the Governor. The notice, and ERCOT's data-center impact page checked November 1, still put the report on or before December 10. The page does not post results. Interconnection of computational load at or above 75 MW still waits on that report. The mid-November date is the agency's estimate for the electronic filing system.

The October 9 order

197 FERC ¶ 61,019 accepts two tariff pieces and rejects the package around them. Large Load means end-use customer load with a cumulative peak of 50 MW or greater at a single electrical site behind one or more points of interconnection. Affiliated load facilities inside a one-mile radius count as one site. The Commission found the 50 MW line just and reasonable, including for manufacturing and industrial load as well as data centers, and it found the one-mile test a reasonable way to keep a campus of smaller buildings from falling under the line. The Large Load Registry stays with the definition. PJM must submit, within 30 days of October 9, tariff records that keep those two pieces and remove New Large Load and the language for Interim Resource Adequacy Service and Bring Your Own New Capacity. The ER26-3515 docket sheet from October 9 through October 31 shows the order and a Pennsylvania Public Utility Commission service-list filing, accession 20261015-5085. It shows no compliance filing. The order rejects IRAS and BYONC because parts of the filed tariff sit outside the Commission's authority or were not shown to be just and reasonable, and because the transmittal and the tariff records did not describe the same product. The variable-resource-requirement exclusion of Eligible New Large Load, beginning with the 2029/2030 delivery year, goes out with that package. New Large Load is rejected without prejudice. Commissioner Rosner concurred that, in an emergency, data centers not serving critical functions should be shut off before homes, hospitals, and schools, and only after voluntary demand response. The registry is a record of loads at or above 50 MW. Curtailment priority and a capacity purchase remain separate proceedings.

Docket ER27-330

On October 23, FERC's notice in Docket Nos. ER26-3380-000 and EL26-108-000 extended initial briefs in EL26-108-000 from November 13, 2026 to 5 p.m. on January 11, 2027, and reply briefs from December 3, 2026 to 5 p.m. on January 26, 2027. The notice answers the October 13 abeyance motion by extending those deadlines. The October 29 transmittal amends the three items set for that paper hearing. Electric Distributors outside a Fixed Resource Requirement service area must report, no later than seven days before the procurement opens, aggregate incremental Large Load growth between the 2026 actual summer peak and the expected 2028/2029 summer peak. The report uses the Large Load definition from the October 9 order. Each zone's share of the cost follows its share of that growth, and the target is capped at the growth the distributors report. Danielle Croop's affidavit says the 2026 load forecast indicates approximately 9,000 MW of large-load growth and an approximately 6,800 MW regional shortfall, and that PJM believes reported growth will remain above that shortfall. The September 29 order stated the auction shortfall as 6,831 MW. It recorded the market monitor's claim that, after 4,017 MW of cancelled or delayed data-center load, the shortfall would be 3,055 MW. The affidavit stays with approximately 6,800 MW and recalculates the target with the February 2027 forecast and accreditation factors. It keeps the 2028/2029 delivery year as the basis. Collateral moves from $1.5 million per committed MW to 40 percent of the net present value of the total RBP payment obligation. Gwen Kelly's affidavit puts the illustrative rate at approximately $686,000 per MW at the $555/MW-day maximum, about 3.4 years of undiscounted payments. The analysis uses a 4.05 percent probability of default and a weighted-average load-serving-entity rating of BBB. Surety bonds join letters of credit and cash. A load-serving entity that withdraws remains responsible for the remainder of the RBP charges allocated to it, subject to a rate filing. The transmittal says no load-serving entity has indicated an intention to withdraw. The opt-out tied to regulatory status comes out. Most revisions would take effect February 28, 2027. Attachment DD, section 18.3A, the distributor report, would take effect January 29, 2027. PJM asks for an order by that date and for comments by November 30, 2026. The sell-offer window runs four weeks from March 1, 2027, if the Commission accepts the filing, so cycle 01 developers can see phase 1 results scheduled by March 26. PJM's Inside Lines account puts the close on March 28, the final target on April 28, and results on May 10. The September 29 suspension still runs to February 28, 2027.

The October 28 CAISO vote

On October 28, 2026, the California ISO Board of Governors approved the large-load enhancements described in Neil Millar's October 22 memorandum. Governor Schori moved. Governor Borenstein seconded. The vote was 5-0, with Borenstein, Eto, Leslie, Reynolds, and Schori voting yes. The motion authorizes management to make the Federal Energy Regulatory Commission filings required to implement the proposal, including later discrete revisions if an initial order supplies guidance. The ISO's news release the same day says the filing will be made by November 16. The memorandum defines a large load as an end user behind a point of interconnection, with peak load of 50 MW or greater, connecting to the ISO-controlled grid. It sets a monthly review of transmission additions that fall outside the annual planning cycle, so participating transmission owners can meet the Commission's 60-to-90-day window for load interconnection studies. It requires hourly forecasts, telemetry, and communication protocols so the ISO can coordinate with the participating transmission owner to disconnect a large load remotely when reliability requires it. Flexible Interim Load Interconnection would give a large load curtailable service, sized to grid conditions at its point of interconnection, until the network upgrades are complete, and firm service after that. The memorandum treats the interim service as a contract built from that customer's study, and it defers a permanent flexible product. Electrically proximate generation is deferred with it. The ISO's draft infrastructure roadmap puts policy development on those two items in early 2027. On cost, the memorandum relies on the transmission access charge and on public posting of aggregate large-load additions, the network upgrades planned for them, and a cost estimate for each upgrade. Co-located load would be metered apart from on-site generation so ancillary-service charges are assessed on the load. The Board vote authorizes the filing. The section 205 tariff is the next document.

SPP and MISO

SPP's ER26-3685 docket sheet for October 1 through October 31 shows no filings. The September 2 clarification of Conditional High Impact Large Load policy is still the tariff in that docket. There is no order. The conditional path remains open. MISO's ER26-3650 docket sheet from October 19 through October 31 shows one filing: an October 28 motion for leave to answer by Central Municipal Power Agency Services and others, accession 20261028-5128, responding to MISO's October 13 answer. There is no order. The August 28 filing, accession 20260828-5278, still requests an effective date of December 4, 2026. That is process, not reserve margin. The only published grade change on the scorecard remains August 17, ERCOT, A to A-. October added no history row. This report uses the letters in the file as of October 26.

The calendar from here

November 16 is the filing date in CAISO's October 28 release, for the ISO and the participating transmission owners. November 30 is the comment date PJM requested in the ER27-330 transmittal. Mid-November is the date TCEQ printed for the STEERS modification. December 4 is the effective date MISO requested in ER26-3650. December 10 is the report date in Market Notice M-B091426-01. January 11 and January 26, 2027, are the extended brief dates in the October 23 notice. January 29 is the order date PJM requested, and the effective date it requested for the distributor-reporting record. February 28, 2027, remains the suspended effective date in 196 FERC ¶ 61,245. A further ERCOT notch would take a report date past December 10, or a freeze that reaches load already cleared to energize. A further PJM notch would take an accepted procurement, or a shortfall the Commission treats as larger than the auctions already in the grade. The same shock is not cut twice.

Sources

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