Sunday, February 22, 2026

6.5 GW Under Construction, $98 Billion Stalled at the City Line

Texas is building toward 6.5 GW of datacenter capacity by 2030, but the pipeline can't outrun the politics. San Marcos killed a $1.5 billion facility at 2:14 a.m. after 182 citizens testified over aquifer fears, while grassroots groups nationally stalled $98 billion in projects in Q2 alone. The top five hyperscalers have committed $710 billion in 2026 capex into a market with 1% vacancy, yet grid connection timelines now average four years, and communities from Central Texas to small-town Kansas are discovering they'd rather say no than absorb unquantified water and power demands. That's a structural collision developers can't solve with capital alone.

Today's Lead

Texas is on track to become the world's largest data center market by 2030, with 6.5 GW under construction, but a coast-to-coast wave of community opposition is threatening to choke the pipeline before it delivers. JLL's year-end 2025 report shows North American vacancy locked at 1% for a second consecutive year and the top five hyperscalers committing $710 billion in 2026 capex. Yet the same week, San Marcos killed a $1.5 billion datacenter at 2:14 a.m. after eight hours of public testimony dominated by water and aquifer concerns, and grassroots groups nationally stalled $98 billion in projects in Q2 2025 alone. The collision between unprecedented demand and unprecedented resistance is now the defining tension in datacenter development.

[1]·[2]·[3]

Water

San Marcos Rejection Draws the Line on Aquifer-Stressed Siting in Texas

San Marcos City Council voted 5-2 to block Highlander SM One LLC's 200-acre facility after 182 citizens signed up to testify, with opposition overwhelming support. The timing was stark: one day before the vote, Hays County Judge Ruben Becerra proposed a moratorium on new building permits requiring large water consumption, and local water managers warned the Edwards Aquifer could trigger stage four emergency protocols. Highlander can refile in six months, but a county-wide moratorium on high-water-demand construction would block resubmission unless the developer fundamentally redesigns cooling infrastructure. This is the sharpest water-driven rejection in Texas to date, and it sets a template other Central Texas communities will study closely.

[2]·[4]

Politics

Texas Communities Mobilize, but Local Regulatory Tools Remain Unclear

Organized opposition is spreading across Texas faster than local governments can respond. Infrakey's $10 billion, 520-acre proposal near Lacy Lakeview has drawn 3,000 petition signatures, a dedicated website, and strategy meetings attended by state Rep. Pat Curry (R-Waco) and Texas Senate District 22 candidate Rena Schroeder. Harlingen residents addressed their City Commission only to learn the proposed site sits outside municipal jurisdiction. Hood County leaders rejected a construction pause after a state senator threatened legal action.

The pattern is consistent: mayors and county officials claim powerlessness, yet haven't clarified what regulatory tools they actually possess. The absence of quantified water demand or power capacity figures in these local debates means the public conversation is proceeding without the technical grounding that would let communities make informed tradeoffs. If Texas doesn't produce clearer guidance on local siting authority, expect lawsuits to fill the vacuum.

[4]·[2]

Politics

Moratoriums and Incentive Pauses Spread Across the Midwest and Mid-Atlantic

The political backlash extends well beyond Texas. Illinois Gov. JB Pritzker proposed a two-year suspension of datacenter tax incentives, citing grid strain and ratepayer cost exposure, embedded in his $56 billion 2027 budget. Pennsylvania's House Energy Committee postponed a vote on HB 2151, the state's first model datacenter zoning ordinance, while state Senator Katie Muth announced plans for a three-year hyperscale moratorium. Miami County, Kansas commissioners are drafting a moratorium after Alcove Development's $1 billion proposal in Osawatomie (pop. 4,000) promised 150 MW daily power draw and 1 million gallons of water.

Virginia's House passed HB 897, continuing tax exemptions but requiring fossil fuel phase-outs and clean energy matching. Linn County, Iowa took a different path, unanimously approving a proactive zoning ordinance designed to attract datacenters on the county's terms. The regulatory spectrum now runs from outright moratoriums to structured welcomes. Developers without a state-by-state political risk model are flying blind.

[5]·[6]·[7]·[8]·[9]

Power

Grid Connection Timelines and Cost Allocation Become the Industry's Central Constraint

JLL reports grid connection timelines now average four years or longer. In Hamilton, Ohio, a power study concluded it would take approximately 30 months to deliver just 45 MW against Logistix's 240 MW request, forcing the project into indefinite pause. In Edwardsville, Illinois, Cloverleaf Infrastructure's three-facility project is stalled pending Ameren's response on electrical capacity. Invenergy and Tallgrass signed a gas supply deal on February 20 for up to three new plants in Arizona's Maricopa and Yuma counties, directly addressing interstate pipeline constraints that bottleneck a state where demand is projected to spike 40% in five years.

Meanwhile, according to a New York Times report, Senators Hawley and Blumenthal introduced legislation requiring datacenters to build their own power sources entirely, and PJM wants authority to charge datacenters for reserved capacity "whether they show up and use the power or not." Anthropic and Microsoft have pledged to cover 100% of their grid upgrade costs, but Harvard's Belfer Center flags the accounting problem: utilities can't cleanly isolate which upgrades serve which datacenter in clustered regions. If cost allocation rules get written wrong, the fallout hits either ratepayers or project economics.

[10]·[11]·[12]·[13]·[1]

Sources we cited

13 articles across 13 publishers · 65 reviewed today

[1]Dallas Express
Texas Could Become World’s Largest Data Center Hub By 2030
Feb 21, 2026·Texas could overtake Northern Virginia as the world’s largest data center market by 2030, according to JLL’s North America Data Center Repor…
[2]KUT
San Marcos City Council blocks proposed data center
Feb 18, 2026·The San Marcos City Council voted 5-2 early Wednesday to deny a request for a land use change that would have cleared the way for a data cen…
[3]Time Magazine
The People vs. AI
Feb 19, 2026·One icy morning in February, nearly 200 people gathered in a church in downtown Richmond, Va. Most had awakened before dawn and driven in fr…
[4]The Good Men Project
Texans Are Demanding Their Local Governments Push Pause on Data Centers. Can They?
Feb 22, 2026·February 22, 2026 by The Texas Tribune Leave a Comment By Berenice Garcia and Sam Shaw The Waco Bridge, The Texas Tribune This article was…
[5]Engineering News-Record
Illinois Governor Targets Data Center Tax Breaks For Proposed Pause - Engineering News-Record
Feb 19, 2026·Rolling out a proposed $56-billion state budget for 2027, Illinois Gov. JB Pritzker (D) is calling for a two-year pause on tax incentives fo…
[6]Bucks County Beacon
Legislation in the State House Seeks to Assist Pennsylvania Municipalities Regulate Data Centers. But Who Would it Actually Help?
Feb 19, 2026·Could Pennsylvania become known for a new kind of farming? The push for statewide regulation of AI data centers in Pennsylvania – also know…
[7]KSHB 41 Kansas City
Miami County Commission considers pause on data center construction following nearby $1B proposal
Feb 20, 2026·KSHB 41 reporter Ryan Gamboa covers Miami County in Kansas and Cass County in Missouri. He also covers agricultural topics. Ryan has extensi…
[8]Inside Climate News
Virginia House Passes Data Center Tax Exemption, With Conditions
Feb 18, 2026·RICHMOND, Va.—The Virginia House of Delegates on Tuesday passed legislation continuing billions of dollars in state tax exemptions for all q…
[9]Corridor Business Journal
Linn County data center ordinance gets final approval
Feb 20, 2026·Linn County Board of Supervisors chair Kirsten Running-Marquardt (center) speaks during a public hearing on the county's new data center ord…
[10]Dayton Daily News
‘Life-changing decision’: Data center growth fuels fears in local communities
Feb 19, 2026·When Angie Markham first heard that a data center was planned about half a mile from her home in Trenton, her first words to her husband wer…
[11]POWER Magazine
Invenergy Inks Supply Deal for Three New Natural Gas-Fired Power Plants in Arizona
Feb 21, 2026·Invenergy, which calls itself North America’s largest privately held independent power producer and energy infrastructure innovator, said it…
[12]The New York Times
Data Centers and Your Power Bill
Feb 19, 2026·New A.I. sites could drive up your power bill. We look at possible solutions. Tech companies are investing billions of dollars to build ene…
[13]Illinois Answers Project
Edwardsville Officials Assured Residents on Facebook The City Had ‘No Formal Proposal’ For a Data Center — But City Emails Tell a Fuller Story
Feb 21, 2026·Sign up for Illinois Answers’ free weekly newsletter to get our latest stories delivered to your inbox every Tuesday morning. By clicking s…

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