Data center power, not chips or demand, is the reason Oracle has sent a “force majeure” notice on one of the largest AI campuses in the United States. On Thursday 24 September 2026, Reuters reported that Oracle had issued the notice to Stack Infrastructure, the Blue Owl Capital unit developing Project Jupiter in New Mexico, “citing potential delays in securing power for the project”. A person familiar with the matter told Reuters that securing power for the site is Oracle’s responsibility under the contract. Oracle’s shares fell about 4% that morning.
The notice does not end the project. Oracle says Project Jupiter “remains on our planned schedule”, and its spokesperson said such notices “do not, by themselves, establish a project delay”. But the reason behind it is spreading. Across the country, AI campuses are being built faster than the power to run them can be permitted, generated and delivered. The grid operator for 67 million people has just failed, for the second year running, to buy all the capacity it needs. Gas turbine makers are taking orders for 2031. And states from Texas to New York are slowing new connections.
We covered the financing side of the Jupiter notice, including Blue Owl’s equity, the $18 billion of bank loans and Oracle’s backlog, in our analysis of the Oracle and Blue Owl project delay. This article follows the power. It explains what is holding up data center power at Jupiter, why the campus planned to make its own electricity, how the national squeeze looks in numbers, why a power delay is a hard case for force majeure, and what businesses planning AI capacity should do about it.
Table of contents
- What Oracle’s Notice Says About Data Center Power at Project Jupiter
- The Two Approvals Standing Between Jupiter and Its Data Center Power
- Why Jupiter Planned to Make Its Own Data Center Power
- The National Data Center Power Squeeze in Numbers
- The Grid Operator’s Data Center Power Warning
- Gas Turbines Are Sold Out: The Equipment Side of Data Center Power
- When Permits and Politics Set the Pace of Data Center Power
- Force Majeure and Data Center Power: The Legal Question
- Who Pays When Data Center Power Arrives Late
- What the Data Center Power Squeeze Means for Businesses
- What to Watch Next for Data Center Power at Jupiter and Beyond
- Frequently Asked Questions About Oracle’s Force Majeure Notice and Data Center Power
- References
What Oracle's Notice Says About Data Center Power at Project Jupiter
Bloomberg News first reported the notice. Reuters, El Paso Matters and The New Mexican added details from people familiar with the deal and from public records. Oracle and Blue Owl have commented on the record, but neither has published the notice.
The notice, and a longer deferral than first reported
According to Bloomberg, Oracle is not trying to leave the lease. It wants the right to delay payments if Project Jupiter fails to come online in 2028 as planned. El Paso Matters, citing the Bloomberg report, said Oracle could win a delay of up to three years before it has to make certain rent payments, if the companies agree on a force majeure event “tied to meeting power commitments”. Reuters’ source separately said the programme is being delayed by about a year because power is late.
Oracle’s reply
Oracle posted on X that “Project Jupiter remains on our planned schedule. We are fully committed to New Mexico and confident in our path forward,” and said it is “reimagining” the project’s power plan. Spokesperson Michael Egbert told El Paso Matters and The New Mexican that force majeure notices “are commonplace in developments of this scale and are often used to preserve contractual rights among project partners”.
Why data center power is Oracle’s problem
Reuters’ source said securing power is Oracle’s responsibility under the contract, that Oracle “cannot terminate the lease under any circumstances”, and that Oracle pays the debt costs. In many data center leases, the developer delivers a powered building and the tenant fits it out. At Jupiter, the tenant carries the data center power risk, which is why the notice comes from Oracle rather than the developer.
| Detail | What was reported | Source |
|---|---|---|
| Notice | Force majeure notice from Oracle to Stack Infrastructure | Bloomberg, via Reuters |
| Cause | Potential delays in securing power | Person familiar, via Reuters |
| Power responsibility | Oracle’s, under the contract | Person familiar, via Reuters |
| Possible rent deferral | Up to three years, if a power-related event is agreed | Bloomberg, via El Paso Matters |
| Reported delay | About one year | Person familiar, via Reuters |
| Oracle’s position | “Remains on our planned schedule” | Oracle |
| Planned power plant | Up to 2.45GW of on-site fuel cells | El Paso Matters |
The Two Approvals Standing Between Jupiter and Its Data Center Power
Jupiter was designed to make its own data center power on site. That plan needs two things that are not yet in hand: permission to run the power plant, and a pipeline to fuel it.
The air permit for 2.45GW of fuel cells
Oracle and its partners plan to power the campus with Bloom Energy fuel cells capable of producing up to 2.45 gigawatts on site, El Paso Matters reported. The New Mexico Environment Department has not yet issued the air permit needed to operate them. A public hearing on the permit was due to start this month but was put on hold while opponents took the case to the New Mexico Supreme Court. The court cleared the way for permitting to resume last week, but the state still has to appoint a hearing examiner and set a date.
The Green Chile pipeline
The fuel cells run on natural gas, which would arrive through Energy Transfer’s Green Chile pipeline, a roughly 18-mile line built by its Transwestern subsidiary. Transwestern originally expected the pipeline in service in August. It now expects February 2027. The New Mexico State Land Office has twice rejected the company’s attempt to cross a 0.6-mile stretch of state trust land, arguing the line would not benefit state lands. How Energy Transfer will get around that denial is unclear.
There has been progress at federal level. Staff at the Federal Energy Regulatory Commission completed an environmental assessment this month concluding that approval would not negatively affect the environment, El Paso Matters reported. It is not a final approval, and public comments stay open until 5 October.
The county’s schedule
Doña Ana County’s tax agreements with the developers set a demanding timetable. According to El Paso Matters, the companies committed to bring a first phase of the campus into operation between October and December 2026, and to complete the whole campus and its power plant by the third quarter of 2028. In return, the developers pay the county $12 million a year for 30 years in place of taxes.
| Date | Data center power milestone at Jupiter |
|---|---|
| 2025 | Oracle agrees 1.8GW of Bloom fuel cells; expanded to 2.8GW in April 2026 |
| March 2026 | State Land Office rejects the pipeline route over trust land |
| July 2026 | Second rejection by the State Land Office |
| August 2026 | Pipeline in-service date moved from 15 August 2026 to 1 February 2027 |
| September 2026 | Supreme Court lets the air permit process resume; FERC staff finish environmental assessment |
| 24 September 2026 | Force majeure notice reported |
| 5 October 2026 | Public comments on the pipeline assessment close |
| October to December 2026 | First phase due in operation under the county agreement |
| Third quarter 2028 | Whole campus and power plant due under the county agreement |
Why Jupiter Planned to Make Its Own Data Center Power
A campus on this scale would once have waited for the local utility. Jupiter chose a different route, and the reasons explain why so many AI projects now build their own data center power.
A greenfield site in the desert
The site is at Santa Teresa, near the Mexican border, on about 1,400 acres. Stack and its partner BorderPlex Digital Assets have said the full project could involve up to $165 billion of investment. No existing grid connection in the area could deliver gigawatts on the schedule the leases assumed, so on-site generation was the plan from the start.
Fuel cells instead of turbines
Oracle expanded its Bloom Energy agreement in April 2026, choosing fuel cells to replace the gas turbines and diesel generators previously planned for Jupiter. Fuel cells avoid combustion but still use natural gas. That is why the pipeline became the pressure point for opponents, and why a permit for gas delivery now decides when the data center power arrives.
Bringing your own power is becoming normal
Jupiter is not unusual in this. BloombergNEF reports that nearly 100 data centers have, or are building, on-site natural gas turbine power, according to The Motley Fool. Across the border in El Paso, Meta’s data center depends on El Paso Electric winning permission to build the McCloud plant, made of 813 small gas-fired generators producing 225 megawatts at a cost of $500 million. On 23 September, two administrative law judges recommended that Texas regulators deny the plant unless the utility holds its other customers harmless from its costs.
| Approach | Example | Main constraint |
|---|---|---|
| Wait for the grid | Most older campuses | Interconnection queues and transmission upgrades |
| Fuel cells on site | Project Jupiter, up to 2.45GW | Gas supply and air permits |
| Gas engines or turbines on site | Meta’s El Paso campus, McCloud plant | Equipment backlogs, cost allocation, permits |
| Utility-built plant for one customer | McCloud proposal | Regulators asking who pays |
The National Data Center Power Squeeze in Numbers
Jupiter’s problems are local, but the pressure behind them is national. The numbers from forecasters and grid operators all point the same way.
Demand doubling by 2027
In May, Goldman Sachs Research forecast that US data center power demand will climb from 31 gigawatts in 2025 to 41 gigawatts in 2026 and 66 gigawatts in 2027. It expects data centers’ share of US peak summer power demand to rise from 4.1% in 2025 to 8.5% in 2027. Scheduled capacity additions reach 13.6 gigawatts in 2026 and 36.3 gigawatts in 2027, against 8.5 gigawatts actually added in 2025.
Only half to 60% on time
Goldman also found that plans and reality diverge. Historically, only about 72% of data centers scheduled to open within the next four quarters did so on time. For the coming period it expects about 60% of scheduled capacity to arrive on time within a year, falling to roughly 50% over two years. Supply chain and labour shortages are the most common causes. Jupiter’s data center power delay is one of the cases behind that average.
What 200 megawatts means
In a paper for the Brookings Institution this week, Columbia’s Stijn Van Nieuwerburgh estimates that a 200-megawatt AI campus would use about as much electricity a year as 170,000 average US households. Jupiter is planned at more than ten times that size. He also estimates that the full AI build-out to 2032 would double the electricity consumption of the entire US residential sector, and he lists grid interconnection delays among the main execution risks for AI infrastructure.
The Grid Operator's Data Center Power Warning
The clearest evidence of strain comes from PJM Interconnection, which runs the largest US power market, serving about 67 million people across 13 states and Washington, D.C.
An auction at the price cap, and still short
In July, PJM’s auction for the 2028-29 delivery year cleared at $325 per megawatt-day across the region, the federally approved cap, The Center Square reported. PJM bought 138,318 megawatts of capacity, 3,733 megawatts more than the year before, but only 525 megawatts came from new generation and upgrades. It still fell 6,831 megawatts short of its reliability requirement, the second shortfall in a row. “These auction results show that demand for electricity continues to grow faster than electricity supply,” said PJM chief executive David Mills.
New data centers first in line for cuts
PJM has asked federal regulators to approve an Interim Resource Adequacy Service. Under it, new large loads of at least 50 megawatts that come online after 1 June 2027 without bringing enough new supply could be required to cut demand during shortages, before other emergency measures affect other customers. For a data center, that turns data center power from a utility service into something that may be interrupted by rule.
A $20 billion backstop auction
PJM is also holding a one-time backstop auction for new capacity from 30 September to 21 October, with results due by 2 December, Utility Dive reported. The price cap is $555 per megawatt-day, well above the base auction’s $325. The Natural Resources Defense Council said PJM will pay up to $20 billion for new plants to help supply data centers built through 2027. PJM estimates that data center and other large-load demand could grow by up to 70 gigawatts by 2038.
| PJM measure | Figure |
|---|---|
| Price in the 2028-29 capacity auction | $325 per MW-day, the cap |
| Capacity bought | 138,318 MW |
| New generation and upgrades cleared | 525 MW |
| Shortfall against the reliability requirement | 6,831 MW |
| Backstop auction window | 30 September to 21 October 2026 |
| Backstop price cap | $555 per MW-day |
| Possible growth in large loads by 2038 | Up to 70GW |
| Curtailment rule applies to large loads online after | 1 June 2027 |
Gas Turbines Are Sold Out: The Equipment Side of Data Center Power
If the grid cannot supply data center power quickly, the obvious alternative is to build generation on site. That is running into its own queue.
GE Vernova taking orders for 2031
GE Vernova ended the second quarter with 116 gigawatts of gas power equipment backlog and slot reservations, up from 100 gigawatts three months earlier and 83 gigawatts at the end of 2025, according to a review of the manufacturers’ results by Oilprice.com. The company said it is taking reservations for 2031 delivery. Only 53 gigawatts of the 116 is firm backlog. The rest is paid slot reservations that have not yet become orders.
Siemens Energy and Mitsubishi
Siemens Energy ended its fiscal third quarter on 30 June with a 69-gigawatt gas turbine backlog and lead times of three years or more, the same review found. Mitsubishi Heavy Industries reported a 35-gigawatt large-frame backlog. Wood Mackenzie puts global manufacturing capacity at 60 to 70 gigawatts a year, against roughly 110 gigawatts of orders.
Prices have followed
BloombergNEF put the average combined-cycle project at $2,157 per kilowatt last year, up from under $1,500 in 2023. Average lead times for a new combined-cycle plant have stretched from three and a half years in 2023 to about five. For a data center developer, that means the turbines that could power a 2027 campus had to be ordered years ago, which is why fuel cells, reciprocating engines and utility-built plants are filling the gap.
When Permits and Politics Set the Pace of Data Center Power
Jupiter’s delay comes from permits and a pipeline route, not from a shortage of equipment. That pattern is spreading, as states and utilities try to separate real projects from speculative ones.
Texas audits its queue
In August, Texas governor Greg Abbott ordered an audit of every data center in the ERCOT interconnection queue after large-load requests swelled to roughly 474 gigawatts, about 90% of them data centers, the Oilprice.com review reported. ERCOT suspended its “Batch Zero” large-load process. BloombergNEF estimated that nearly 50 gigawatts could be delayed.
Utilities trim their pipelines
Exelon cut its “high probability” data center load from about 18 gigawatts to about 11 gigawatts on 30 July, and its broader pipeline fell from about 43 gigawatts to 25 gigawatts in a quarter. “We now weed out speculative projects,” chief financial officer Jeanne Jones said.
Community opposition
Data Center Watch, which tracks local opposition, counted at least 45 projects worth about $68 billion blocked or delayed in the second quarter of 2026, as we reported in our coverage of data center regulation. At Jupiter, the opposition has targeted water and air permits as well as the pipeline. Energy Transfer’s chief executive Mackie McCrea told analysts in August that “a lot of those same environmental activists are also shifting over, and now they’re trying to stop data centers”.
Force Majeure and Data Center Power: The Legal Question
The notice has a legal logic, and it is not straightforward. Whether a data center power delay counts as force majeure will depend on the wording of the Jupiter lease, which is not public. But the general principles show why the question is contested.
What force majeure usually covers
Force majeure clauses excuse a party from performing when events beyond its control, and not reasonably foreseeable when the contract was signed, make performance impossible or impractical. Natural disasters, wars and government actions are typical examples. Many contracts list the events that qualify. Others use general wording.
Why a power delay is a hard case
A data center power delay sits awkwardly in that definition. The risks at Jupiter were visible early: the pipeline route was rejected in March and again in July, and opponents challenged the permits from the start. The developer could argue that delays in permitting a gas pipeline for a desert campus were foreseeable, and that a party which took responsibility for power took that risk too. Oracle could argue that government decisions, such as a state agency twice refusing a route, are exactly the kind of event force majeure is meant to cover.
Why lawyers are rewriting contracts
“These contracts are so rapidly evolving. If you look at a data center contract from January this year and a contract today, it’s massively different,” Quinn Emanuel partner Rajat Rana told Reuters. The direction of travel is clear: developers and tenants are writing power delays into their agreements explicitly, rather than leaving them to general force majeure wording. For anyone buying capacity, that means the data center power clause is now one of the most important in the contract.
| Argument | For treating the delay as force majeure | Against |
|---|---|---|
| Cause | State agency decisions on the pipeline route and permits | Risks were visible before the notice |
| Control | Permits are outside Oracle’s control | Oracle took responsibility for power under the lease |
| Remedy | Defer rent until power arrives | Rent was priced on a 2028 opening |
| Precedent | Notices are “commonplace”, Oracle says | Lenders are rewriting contracts to limit them |
Who Pays When Data Center Power Arrives Late
The costs of late data center power do not fall on one party. Our financing analysis sets out the numbers for Oracle, Blue Owl and the lenders. The wider picture includes people outside the deal.
| Who | What a data center power delay does to them |
|---|---|
| Oracle, the tenant | Pays lower rent for longer if the notice holds; revenue from the campus starts later |
| Blue Owl and Stack, the developer | About $3 billion of equity earns its lower development yield for longer |
| The banks | About $18 billion of loans already quoted below par, harder to sell on |
| OpenAI, the end customer | Waits longer for capacity on this site |
| Doña Ana County | Relies on $12 million a year in payments under the tax agreement |
| Grid customers elsewhere | Pay higher capacity prices as data centers compete for power |
The last row matters beyond New Mexico. In PJM, the independent market monitor has estimated that existing and forecast data center load made up about 9% of wholesale power costs this year through July. When data center power comes from the shared grid, other customers share the cost. When it comes from on-site plants, as at Jupiter, the delay and the cost stay closer to the project.
What the Data Center Power Squeeze Means for Businesses
Few businesses will build a gigawatt campus. Many rely on cloud regions, colocation and AI services that depend on someone else’s data center power. The Jupiter notice is a useful checklist for them.
Treat power as the lead-time item
Announced capacity is a forecast, not a delivery date. Goldman’s research suggests that only half to 60% of scheduled data center capacity arrives on time. When a provider promises new capacity in a new region or campus, ask whether the site is already powered or waiting on a grid connection, a pipeline or a permit.
Ask where your provider’s power comes from
A campus on the shared grid, a campus with on-site fuel cells, and a campus waiting for a utility plant carry different risks. Our data center operations team sees contracts written before power became the binding constraint, which say nothing about it. That gap is worth closing at renewal.
Plan for curtailment
If PJM’s proposal is approved, new large data centers in its region could face interruptions during shortages. Critical workloads should have a second region or provider, and a tested failover plan, as part of an IT infrastructure strategy.
| Question for a capacity provider | Why it matters after Jupiter |
|---|---|
| Is the site powered today, or waiting on grid, fuel or permits? | Power, not construction, caused the Jupiter delay |
| Who carries the data center power risk in your contract? | At Jupiter the tenant did |
| Can the site be curtailed by the grid operator? | PJM proposes cuts for new large loads first |
| What does force majeure excuse, and what do you get back? | Clauses are changing fast and increasingly cover power |
| Is there capacity in a second region? | Delays at one site should not stop critical work |
What to Watch Next for Data Center Power at Jupiter and Beyond
Several dates in the next three months will show whether Jupiter’s data center power problem is easing and whether the wider squeeze is getting worse.
5 October: pipeline comments close
The end of the comment period on FERC staff’s environmental assessment is the next step towards federal approval of the Green Chile pipeline. The state land dispute will still need resolving.
The air permit hearing
New Mexico still has to appoint a hearing examiner and set a date for the fuel-cell air permit. Without that permit, the data center power plant cannot operate even if gas arrives.
PJM’s backstop auction
The backstop auction runs from 30 September to 21 October, with results due by 2 December. A weak response from new generation would confirm that money alone cannot buy data center power quickly.
Texas and El Paso
The Public Utility Commission of Texas has to decide on the McCloud plant for Meta’s El Paso campus after the judges’ recommendation, and the ERCOT queue audit is expected to run for several months.
Oracle’s December quarter
Oracle’s second-quarter results, expected in December, will show whether its lease commencement window moves again and whether it discloses anything more about Jupiter’s power plan.
Frequently Asked Questions About Oracle's Force Majeure Notice and Data Center Power
Why did Oracle send a force majeure notice?
Reuters’ source said it was because of potential delays in securing power for Project Jupiter, which is Oracle’s responsibility under the contract.
Is Project Jupiter cancelled?
No. Oracle cannot terminate the lease, and it says the project remains on schedule. The notice lets it seek to defer some payments if power is late.
What is delaying the power?
The on-site fuel-cell plant still needs an air permit from the New Mexico Environment Department, and the gas pipeline that would fuel it has been rejected twice over a 0.6-mile crossing of state trust land. Its in-service date has moved to February 2027.
How long could payments be deferred?
El Paso Matters, citing Bloomberg, reported that Oracle could defer some rent payments for up to three years if a power-related force majeure event is agreed. Reuters’ source described a delay of about one year.
Is this a wider problem?
Yes. Goldman Sachs expects US data center power demand to more than double to 66GW by 2027, PJM’s latest capacity auction fell 6,831MW short, and gas turbine makers are taking orders for 2031 delivery.
What should businesses do?
Treat new capacity as a forecast, ask who carries power risk in your contracts, check whether sites are already powered, and keep a second region for critical workloads.
References
Oracle triggers force majeure on data center project over power delays (Reuters, via MSN)
Oracle says Project Jupiter remains on track despite power supply concerns (El Paso Matters)
Oracle sends force majeure notice to Project Jupiter developers (The New Mexican)
Oracle statement on Project Jupiter (Oracle on X)
Proposed gas pipeline for Project Jupiter data center delayed to 2027 (Source NM)
New Mexico regulators reject natural gas pipeline for Project Jupiter (DCD)
US data center power demand projected to double by 2027 (Goldman Sachs)
PJM files backstop auction plan at FERC to meet capacity shortfall (Utility Dive, via Yahoo)
Future regional power supply down, but not out (The Center Square, via MSN)
The gas turbine shortage just became AI’s biggest constraint (Oilprice.com, via MSN)
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