Challenge to Blackstone’s purchase of Potomac Energy Center for data centers
By Tyson Slocum
Today in Federal Energy Regulatory Commission docket EC25-46, we challenge the February 3 application by Ares Management to sell the 800 MW gas-fired Potomac Energy Center to the private equity firm Blackstone for $1 billion. The facility is located in Virginia’s Loudoun County, which hosts 25% of the United States’ entire data center capacity. Indeed, Blackstone’s Bilal Khan said the private equity fund was acquiring the facility in part because of “its unparalleled access to data centers in Virginia”.[1]
The application is deficient because it omits Blackstone’s role as the largest data center provider in the world, controlling a $70 billion portfolio, with as much as 1000 MW of data center load in Virginia.[2] Blackstone controls QTS Realty Trust,[3] which operates data centers in Virginia and throughout PJM,[4] and has a joint venture with a separate data center company, Digital Reality,[5] which operates an additional 15 data centers in Virginia and is building so-called hyperscale data centers there.[6] The application contains no information about Blackstone’s control of data centers in Virginia or PJM, and whether Blackstone’s planned acquisition of Potomac Energy Center is directly or indirectly connected to its control of data centers.
Blackstone’s significant control of data centers in and around Potomac Energy Center’s PJM sub-market renders Blackstone as a pivotal controller of load in the region, which raise anti-competitive concerns. As a hypothetical, Blackstone could execute a market manipulation strategy involving shifting its significant control of regional data center load in combination with its control of Potomac Energy Center’s 800 MW of capacity.
The application should therefore be considered deficient, until it is amended with more information about Blackstone’s control of data centers in PJM. Read the two page filing here: Potomac Energy Center
[1] www.reuters.com/business/energy/blackstone-buy-1-billion-virginia-power-plant-near-data-centers-2025-01-23/
[2] www.perenews.com/blackstones-lepatner-well-be-the-largest-owner-of-data-centers-globally/
[3] www.reuters.com/business/blackstone-take-qts-realty-trust-private-10-bln-deal-2021-06-07/
[4] https://qtsdatacenters.com/us-locations/
[5] www.wsj.com/real-estate/blackstone-digital-realty-team-up-to-develop-7-billion-in-data-centers-a7799912
[6] www.digitalrealty.com/data-centers/americas/northern-virginia