Oracle could delay some rent payments for up to three years if Project Jupiter\u2019s power supply is not ready on time, according to a force majeure notice the technology company sent to the developer of the massive data center under construction near Santa Teresa, according to reporting from Bloomberg.<\/p>\n
Oracle said its data center plans haven\u2019t changed. But the force majeure notice comes as two essential parts of the data center\u2019s planned power generation system \u2013 an air permit for a 2.45-gigawatt fuel-cell power plant and a new natural gas pipeline to fuel it \u2013 have faced delays and permitting hurdles and remain unresolved.<\/p>\n
Bloomberg first reported Wednesday that Oracle had sent the force majeure \u2013 a notice citing unforeseen circumstances that will impact contractual obligations \u2013 to the Project Jupiter developer, Stack Infrastructure. The notice is Oracle\u2019s attempt to avoid payment obligations if the data center doesn\u2019t start operating as expected in about two years. Stack is owned by the investment firm Blue Owl Capital. Stack Infrastructure did not respond to a request for comment.\u00a0<\/p>\n
In a statement, Oracle said Project Jupiter remains on schedule and that the company is \u201cfully committed to New Mexico and confident in our path forward.\u201d<\/p>\n
\u201cForce-majeure notices are commonplace in developments of this scale and are often used to preserve contractual rights among project partners,\u201d Oracle spokesman Michael Egbert said. \u201cThey do not, by themselves, establish a project delay or change delivery expectations.\u201d<\/p>\n
PODCAST: Meta touts community funding in El Paso as Oracle\u2019s Project Jupiter faces permits, gas pipeline and power questions<\/a><\/p>\n Citing unnamed sources, Bloomberg reported<\/a> that Oracle could win a three-year delay before it has to make rent payments if the company and Blue Owl agree to a force majeure event \u201ctied to meeting power commitments\u201d.<\/p>\n In the tax break agreements between Do\u00f1a Ana County and Project Jupiter, the companies developing the data center committed to bring a first phase of the facility into operation between October and December of this year, and complete the entire campus and power plant by the third quarter of 2028.\u00a0<\/p>\n Do\u00f1a Ana County officials did not respond to a request for comment.\u00a0<\/p>\n Precinct 5 County Commissioner Manny Sanchez said in an interview Thursday that Oracle has not notified the county of any updates on Project Jupiter. He said he expects the company to continue fulfilling its commitments to the county and making payments in lieu of taxes; the agreement calls for the developers to pay $12 million in flat payments to Do\u00f1a Ana County, annually, for 30 years.\u00a0<\/p>\n Power plant, gas pipeline awaiting approvals<\/p>\n Oracle and its partners plan to power the campus using a huge array of Bloom Energy fuel cells capable of producing up to 2.45 gigawatts of electricity on site. The proposed power plant would run on natural gas delivered through a new pipeline.<\/p>\n The New Mexico Environment Department has not yet issued the air permit needed to operate the fuel-cell system. A public hearing on the permit was set to begin this month but was on hold for several weeks amid lawsuits filed by opponents of Project Jupiter before the New Mexico Supreme Court. The court last week cleared the way for the permitting process to resume, although the state still has to appoint a hearing examiner and set a hearing date.<\/p>\n The company developing the proposed gas pipeline has already pushed back the schedule for bringing the pipeline into operation.<\/p>\n Transwestern Pipeline, a subsidiary of Dallas-based Energy Transfer, initially expected the roughly 18-mile Green Chile pipeline to begin service last month. Transwestern has since pushed its expected in-service date to February. The New Mexico State Land Office has twice rejected Energy Transfer\u2019s attempt to have the pipeline cross a 0.6-mile stretch of state trust land, arguing the pipeline would not benefit state lands.\u00a0<\/p>\n How Energy Transfer will overcome the state\u2019s denial is unclear. In an Aug. 4 earnings call with Wall Street analysts, an executive with the company declined to provide specifics about the pipeline status, but said Energy Transfer was working with federal regulators and other stakeholders.\u00a0<\/p>\n \u201cWe\u2019re in constant communication with them and are very confident that this pipeline will be put into service and will be ultimately successful,\u201d said Adam Arthur, head of the company\u2019s liquids business.\u00a0\u00a0<\/p>\n On the same call, Energy Transfer chief executive Mackie McCrea said opposition to the Project Jupiter pipeline is part of broader activism against data centers tied to climate change concerns.\u00a0<\/p>\n \u201cA lot of those same environmental activists are also shifting over, and now they\u2019re trying to stop data centers,\u201d McCrea said. \u201cThis, we believe, is much more of a data center focused kind of protest activity.\u201d<\/p>\n