Firm or Recallable: The Gas Capacity Question in the Next Data Center States

A client call I was on this week with one of our banks closed with a stat worth keeping. Five states hold about 60 percent of the data centers in the country today. The fastest growth is happening in six others.

Read the second list from the fuel side and a pattern shows up. The incumbent states built their gas systems around large industrial and power load over decades. Several of the growth states sit close to good supply, but their pipelines were sized for utility demand that grows a few percent a year, not for one customer who arrives needing a regional expansion's worth of gas. When capacity gets that tight, the word "firm" starts meaning different things depending on who is selling it.

What the Growth Looks Like on the Ground

Missouri and Kansas show the scale. Cleanview data reported by Axios in late September has Missouri at about 340 MW of operating data center load by the end of this year and more than 7,400 MW if the 50 planned projects get built. Kansas goes from roughly 30 MW to nearly 1,400 MW. Some of the biggest projects are planning their own gas generation. Nebius's campus in Independence will run on a plant at the retired Blue Valley site that is slated to reach about 1,100 MW by the end of 2029, and Cloverleaf's Project Bluestem near Tonganoxie doubled to 1.2 GW with an on-site gas plant.

Michigan is growing through its utility. DTE reported a data center pipeline above 8 GW in July, including the 1.4 GW Oracle contract for the Saline Township campus, with load ramping in 2027 and 2028. In Kentucky, LG&E and KU are adding two 645 MW gas units against a data center pipeline they put near 6 GW. Oklahoma passed a law in 2025 that lets data centers build behind-the-meter plants as long as gas is part of the plant, though most projects there are still asking OG&E and PSO for grid service. Florida sits at the end of the pipe, gets about 70 percent of its generation from gas, and is supply constrained enough that Chesapeake Utilities is building a new intrastate line into South Florida that depends on Florida Gas Transmission completing its Phase IX expansion upstream.

Whether these projects take gas directly at an on-site plant or through a utility building new units, the demand lands on the same interstate systems.

One Campus Can Fill a Pipeline Expansion

A 1.2 GW gas plant running flat burns roughly 200,000 to 250,000 Dth/d depending on heat rate. Compare that with the expansions these regions are actually building.

Southern Star filed Cedar Vale at FERC in late 2024 to serve coal retirements and load growth around Kansas City, Topeka, Springfield and Joplin. Its market-area capacity is less than half of what one large campus would burn. Chesapeake's Florida line has nearly 250,000 Dth/d of firm commitments from multiple shippers, which is about one campus's worth of gas for the whole project. Most of these expansions were sized before the data center load showed up.

So developers in the growth states are hearing "firm" offers that are not the same product, because the capacity to back all of them does not exist yet.

What "Firm" Actually Means on a Pipeline

Released capacity is where the confusion sits. The releasing shipper is very often a local distribution company that holds capacity to serve its own customers on the coldest day of the year. Most of the year it does not need all of it, so it releases the excess, frequently through an asset management arrangement with a marketer, and it keeps recall rights.

Recall is written into the nomination schedule. On the Tallgrass pipelines, for example, a releasing shipper can submit a recall ahead of the timely cycle at 9:00 AM Eastern, ahead of any of the three intraday cycles, or as late as the evening cycle at 6:00 PM. An intraday recall takes the capacity back during the gas day you are already flowing.

Now think about when an LDC recalls. It holds that capacity for its design day, so the days it wants the capacity back are the coldest days of the year. Those are the days gas prices blow out, the grid is tight, and an on-site plant serving a data center most needs to run. During Winter Storm Fern in January, Henry Hub set a record at $30.565/MMBtu. Recallable capacity is there for most of the year and can be gone on the handful of days that decide whether a site with a five-nines uptime obligation holds.

The same caution applies to supply. A marketer can sell you a gas deal labeled firm that moves on released or secondary capacity. The molecules are firm until the transport underneath them is not, and firm supply on non-firm transport is not firm delivery.

Recallable Capacity Still Has a Place

None of this makes recallable capacity useless. In a constrained market it is often the only capacity available on day one. It can carry a site through construction and early ramp while a precedent agreement for expansion capacity works through an open season, the FERC certificate and construction. It is usually priced well below primary firm, and for a reason. The mistake is underwriting it as if it were primary firm, or not knowing which one you bought.

The structure that works in tight regions is a stack: recallable capacity where the site can live without it on a recall day, primary firm or a firm delivered product where it cannot, and a defined plan for the recall day itself. I wrote about the contract terms behind that in 5 Things Your Gas Supply Agreement Needs Before You Close Project Finance.

Questions to Ask Before You Sign

• What capacity backs the delivery: primary firm on a contracted path, secondary firm, released capacity, or an asset management arrangement?
• If it is released capacity, who is the releasing shipper, does the release carry recall rights, on which nomination cycles, for what term, and what happens to your price and volume on a recall day?
• What is the plan for the recall day itself: a second supply path, backup fuel, or a contractual remedy with real money behind it?
• Which pipelines can reach your site, and when is the next open season on each of them?

Lenders and offtakers will ask these questions during diligence. It is better to have the answers written into the agreement than to work them out on a call.

If You're Building in the Growth States

If you are in planning or pre-construction on a data center or other large load in Missouri, Kansas, Oklahoma, Florida, Michigan or Kentucky, and you are weighing grid service against on-site generation, the fuel side is where most of the schedule risk sits. That is the part I work on: confirming what kind of capacity actually backs a supply offer, stacking recallable and primary firm where each one fits, and getting projects into the right open seasons early. If PJM is part of your footprint, the backstop auction makes the same point from the grid side, which I covered in Bring Your Own Power.