Wednesday, May 20, 2026

Water Plan Skips the 400 GW Queue. Smart Developers Won't.

Texas's draft 2027 water plan doesn't mention datacenters, Oklahoma just codified cost-causation for 75 MW+ loads, and Fort Worth's June 2 policy reset will set the regional template. The developers locking water offsets, closed-loop cooling, and full cost-recovery anchor terms now are buying themselves a two-year head start on rules everyone else will face mid-build.

Today's Lead

Texas's grid planners are staring down a 400 GW interconnection queue while the state's draft 2027 water plan makes zero mention of data center demand. Eric Goff of Goff Policy calls the queue "effectively infinite," and ERCOT's "Batch Zero" framework, plus the first PUCT-approved 765 kV lines and the ERCOT Board's $9.4 billion Eastern Backbone, are the mechanisms that convert queue position into construction schedule.

Meanwhile, El Paso Electric filed a "High Load Factor Large Power" tariff at the PUCT to keep residential and small-business customers from subsidizing 1-2 GW of incoming hyperscaler load. The cost-causation question is now the central design problem in Texas power.

[1]·[2]·[3]

Power

Cost-causation is becoming table stakes, and Texas hasn't codified it yet.

Oklahoma Governor Kevin Stitt signed HB 2992 on May 11, requiring large-load customers at 75 MW or above to sign long-term cost-recovery agreements effective July 1. El Paso Electric is pursuing the same outcome through tariff design at the PUCT, with peak-hour pricing from 2-7 p.m. and a "cost-based and not discounted" structure. Senate Bill 6 already gave ERCOT and utilities authority to disconnect large loads and deploy dispatchable campuses.

The cost-allocation choice (minimum charge, 12CP, or 4CP) will determine whether the buildout lowers per-unit costs or shifts them to residential customers. Developers who structure anchor-tenant agreements around full cost recovery now will move through tariff review faster than those banking on legacy rate design.

[4]·[2]·[1]

Water

Texas is planning blind while developers race to lock cooling strategies.

The Texas Water Development Board's draft 2027 plan doesn't mention data centers. University of Texas researchers estimate the sector could consume more than 9% of state water use by 2040, potentially exceeding oil and gas. PUC Chair Thomas Gleeson told lawmakers the state lacks a "clear picture." More than 65% of Texas was in drought as of May. The next plan draft won't appear until 2032.

Wyoming offers the playbook: Prometheus Hyperscale CEO Trenton Thornock testified that direct-chip cooling and closed-loop propylene glycol systems refill once every six years, and Cheyenne tied a separate datacenter electric tariff to zoning approval before scale arrived. Texas developers who lock water rights, closed-loop cooling commitments, and county-level offsets now will be ahead of the legislative catch-up in 2027.

[3]·[5]

Politics

Fort Worth resets the timeline; Denver writes the cautionary footnote.

Fort Worth deferred Edged Data Centers' $1 billion Veale Ranch incentive on March 31 and will receive City Manager Jay Chapa's comprehensive policy analysis June 2. Council member Michael Crain pointed to Meta's $1.5 billion north Fort Worth campus, operating over a decade without resident complaints, as the compatibility benchmark. Crain isn't anti-development; he's demanding ERCOT transmission studies and best-in-class mitigation upfront.

Denver's unanimous one-year moratorium, triggered by CoreSite's DE3 facility (14 diesel generators 70 feet from a respiratory clinic, 230,000 gallons/day projected), shows what happens when site adjacency and water disclosure aren't front-loaded. Developers who deliver Fort Worth's June 2 baseline (signed power procurement, water offsets, neighborhood compatibility analysis) will move. Those who don't will watch the incentive framework tighten.

[6]·[7]

Sources we cited

7 articles across 7 publishers · 297 reviewed today

[1]Texas Energy and Power Newsletter
How Texas plans to serve ‘infinite demand’
May 20, 2026·Eric Goff, founder of Goff Policy on batch zero, transmission planning, and how Texas can serve new load without shifting costs onto existin…
[2]El Paso Matters
More data centers could be coming to El Paso. What will that mean for your electric bills?
May 19, 2026·El Paso Electric is signaling that more large-scale artificial intelligence data centers are likely to come to the Borderland over the next …
[3]E&E News
Texas water plan ignores data center surge
May 20, 2026·A tidal wave of data centers is heading for Texas. Just don’t expect the state water plan to mention it. State agencies have only recently …
[4]Datacenter Knowledge
Oklahoma Law Opens New Front in AI Data Center Power Debate
May 19, 2026·New legislation aims to prevent AI and hyperscale data center power costs from being shifted onto residential utility customers. Oklahoma h…
[5]WyoFile
Amid growing concern, data center developers insist they won’t stress Wyoming water
May 19, 2026·Among the many data center developers with sights on Wyoming, two of them alone — Microsoft and Prometheus Hyperscale — could require more p…
[6]Fort Worth Report
As Fort Worth prepares to hold ‘robust’ discussions on growing data centers, residents rally together
May 18, 2026·A June 2 meeting could shape how city leaders approach data centers looking to set up shop in Fort Worth.
[7]KUSA
'My biggest regret on council': Denver city council apologizes for allowing data center to be built, passes moratorium
May 20, 2026·DENVER — The Denver City Council voted unanimously Monday night to impose a one-year moratorium on new data center construction in the city,…

Search across 25,000+ tracked articles → coming with paid