Tuesday, March 31, 2026

Texas's $25M Queue Fee Separates Serious Developers From Everyone Else

Texas's SB6 is locking in a $25 million price of admission for 500 MW projects, a threshold that doesn't faze Meta's $10 billion El Paso commitment or Digital Realty's $3.25 billion hyperscale fund but quietly clears mid-tier developers from a queue that hyperscalers will inherit. While 12 states file moratorium bills and Wisconsin deadlocks, the operators getting filtered out in Texas are the ones competitors in Wyoming and beyond were counting on never showing up.

Today's Lead

Texas is setting the price of admission for hyperscale power, and the industry is pushing back hard. The Public Utility Commission of Texas is implementing five parallel rulemakings under SB6, with proposed interconnection standards demanding $50,000-per-megawatt deposits and 80% forfeiture penalties for withdrawal, costs that Monarch Energy calculates could mean $25 million upfront for a single 500 MW project just to discover grid feasibility. Aurora Energy Research's Anne Liu flagged the national stakes plainly: other markets will mirror how Texas resolves this developer-regulator tension.

Meanwhile, rival states are moving fast. Wyoming greenlit Crusoe Energy's 1.8 GW initial phase (expandable to 10 GW) in Laramie County, and the state convenes a closed-door Jackson summit April 1-2 to pitch hyperscalers on its tax-free, cold-climate, nuclear-backed advantages. The race for AI infrastructure is a multi-front competition, and the terms Texas sets in 2026 will determine whether capital stays or migrates.

[1]·[2]·[3]

Power

SB6 rulemaking puts Texas interconnection economics on trial

PUC staff published proposed interconnection rules in mid-March requiring developers above 75 MW to post $50,000/MW deposits, disclose property interests and backup generation plans, and cover 100% of direct construction costs. Withdrawal triggers 80% forfeiture. Developer comments are pouring in ahead of April deadlines, with the 80% clawback drawing the sharpest objections. All five SB6 rulemaking tracks must land by end of 2026.

The outcome shapes far more than Texas. Aurora Energy Research's Liu noted federal policy often follows ERCOT precedent despite the grid's independence from FERC. If final rules stay punitive, developers with optionality will shift capital to Wyoming, Louisiana, or other states offering cleaner on-ramps. PUC staff will almost certainly revise the proposals, but the direction of revision determines whether Texas retains its lead or exports demand to competitors.

[1]

Power

Wyoming and Louisiana emerge as credible alternatives to Texas

Wyoming approved Crusoe Energy's Project Jade in Laramie County: 1.8 GW initial phase powered by Tallgrass Energy Partners' natural gas complex, expandable to 10 GW. The first phase alone would double Wyoming's current energy generation, per the Associated Press. Separately, Wyoming's "Data x Power" summit in Jackson convenes roughly 50 senior leaders from hyperscale firms and energy developers April 1-2. The state pitches zero income tax, TerraPower's Natrium reactor in Kemmerer, semi-arid climate averaging 45 degrees for free-air cooling, and an industrial workforce experienced in pipelines and high-voltage transmission. In Louisiana, Entergy locked in $2.65 billion in customer savings over 20 years to serve Meta's Richland Parish facility, which targets 5 GW of capacity with 2,500 MW of new solar and nuclear support.

Both states are solving the political problem Texas faces: cost-shifting to ratepayers. Wyoming's Crusoe-Tallgrass model builds power on-site, bypassing grid dependency. Louisiana's Entergy-Meta structure guarantees ratepayer protection through Meta's full cost-of-service pledge. Developers weighing Texas interconnection fees should benchmark these alternatives. The risk: Wyoming's grid and water capacity remain material unknowns at 10 GW scale, and Louisiana's 5 GW vision requires generation capacity Entergy hasn't yet specified.

[3]·[2]·[4]

Power

Gas-only bets lose favor as diversified portfolios gain ground

BCG projects an 80 GW US capacity shortfall by 2030 and ranks CCUS-equipped gas plants as the best near-term solution, with behind-the-meter configurations deployable in three years. But at CERAWeek in Houston, Google's Amanda Peterson Corio pushed back directly on gas-only strategies: "If we're just relying on gas, we're also screwed," citing supply chain bottlenecks. Google is building a diversified portfolio at its Minnesota data center mixing wind, solar, 100-hour battery storage, gas, and nuclear. Microsoft is pursuing similarly mixed approaches in Abilene.

Illinois just removed its decades-old nuclear moratorium, opening new pathways for baseload generation in a state that already produces more nuclear power than any other. The risk for Texas developers: single-fuel strategies face pushback from the very hyperscale buyers they need as tenants. BCG estimates $80 billion in CCUS capex if Big Tech embraces gas-with-capture, but buyer preferences are fragmenting. Developers should design for fuel flexibility from day one.

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Politics

Moratorium playbook spreads while Texas capital keeps flowing

Eagan, Minnesota became the first city in the state to impose a data center moratorium, halting facilities larger than 20 MW within 500 feet of homes. Sightline Climate data shows developers delayed or downsized roughly 36% of expected capacity nationally last year. Wisconsin's legislature is deadlocked between Republican and Democratic data center bills over renewable mandates and prevailing-wage requirements, with neither proposal viable. A POLITICO poll found only 37% of respondents offered unqualified support for data centers near homes.

Texas remains the counterpoint. Amazon filed plans for three San Antonio facilities totaling over 370,000 square feet and $65 million, while Meta boosted its El Paso commitment to $10 billion targeting 1 GW by 2028. Digital Realty closed a $3.25 billion hyperscale fund with Dallas among its target metros. But Texas Lt. Gov. Dan Patrick has directed lawmakers to examine impacts on landowners, water, and community integrity, signaling the political window for frictionless approvals is narrowing. Developers moving into San Antonio, El Paso, and West Texas should front-load community engagement and water strategy before legislative scrutiny tightens.

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Sources we cited

12 articles across 12 publishers · 218 reviewed today

[1]Latitude Media
The multimillion dollar debate over powering data centers in Texas
Mar 30, 2026·The rulemaking process for SB6, the state’s landmark large load legislation, is highlighting key sticking points. The post The multimillion …
[2]Cowboy State Daily
Wyoming Pitches Itself To Data Center Developers At Closed-Door Jackson Summit
Mar 30, 2026·A March 2026 report from Blackridge Research identified Wyoming among the states where the Stargate AI infrastructure project — a joint vent…
[3]Route Fifty
Wyoming County approves construction of what could become the largest data center in US
Jan 14, 2026·By Leigh Reagan Smith,Inside Climate News This article originally appeared on Inside Climate News, a nonprofit, non-partisan news organiz…
[4]Entergy Louisiana/Meta
Entergy Louisiana and Meta Seal New Deal to Power $2B in Customer Savings for Mega Data Center
Mar 30, 2026·Entergy Louisiana has announced a new agreement with Meta to support the company’s upcoming hyperscale data center in Northeast Louisiana. T…
[5]BCG
Solving the US Data Center Power Crunch
Mar 30, 2026·Stay ahead with BCG insights on climate change and sustainability Manage Subscriptions The rise of AI is fueling a boom in data cen…
[6]AI: Reset to Zero
AI: Update on 'monster' US AI Energy & Power needs. RTZ #1042
Mar 31, 2026·That Energy and Power are the critical bottleneck in this AI Tech Wave to build hundreds of billion dollars worth of AI Data Centers in the…
[7]ANS
From uncertainty to vitality: The future of nuclear energy in Illinois -- ANS / Nuclear Newswire - American Nuclear Society -- ANS
Feb 6, 2026·Nuclear is enjoying a bit of a resurgence. The momentum for reliable energy to support economic development around the country—specifically …
[8]Finance & Commerce
Focus Feature: Pitfalls of data center development
Mar 30, 2026·Brian Martucci//March 30, 2026// Focus Feature: Pitfalls of data center development Brian Martucci//March 30, 2026// Last month, the Eaga…
[9]Canary Media
Disputes over clean energy may doom Wisconsin data center bills
Jan 16, 2026·A debate playing out in Wisconsin underscores just how challenging it is for U.S. states to set policies governing data centers, even as tec…
[10]San Antonio Express-News
Amazon plans $65M data center for San Antonio’s far West Side - San Antonio Express-News
Mar 30, 2026·An employee pulls out a server rack shelf at an Amazon Web Services facility in Austin. The tech giant is planning to build a 109,000-square…
[11]Meta El Paso
Meta Boosts Investment in El Paso AI Data Center to $10 Billion
Mar 27, 2026·Facility aims for 1-gigawatt capacity ahead of 2028 opening, creating 300 new jobs. Got story updates? Submit your updates here. › Meta ha…
[12]Digital Realty
Digital Realty closes first hyperscale data center fund - raises $3.25bn
Mar 31, 2026·Fund to focus on major US metros, including Virginia, California, and Texas US data center firm Digital Realty has closed its first hypersc…

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