Thursday, June 11, 2026

Abbott Names July 17. The 2027 Rulebook Starts Getting Written Now.

Abbott's July 17 memo and July 31 transmission cost deadline open the drafting window for the 2027 session, while New York moves a one-year moratorium on anything above 20 MW. The developers shaping PUCT rulemaking now, and pairing queue strategy with self-supplied generation and water-aware siting, will own the rules everyone else inherits.

Today's Lead

Texas just got the clearest snapshot yet of what's coming: 500 large data center requests in ERCOT's queue chasing 418 GW of capacity, nearly five times the state's all-time demand record of 85.5 GW set in summer 2023. The same day, Governor Abbott directed PUCT and ERCOT to deliver ratepayer-protection recommendations by July 17 and pledged 2027 legislation requiring data centers to fund their own electric infrastructure, mandate water-efficient cooling, and repeal sales tax exemptions.

The queue is full and the political weather just shifted. Both signals point to the same conclusion: developers who've already secured anchor tenants, locked power, and mapped water are positioned to move. Everyone else is about to spend a long time in line.

[1]·[2]·[3]

Power

Texas Queue Pressure Meets Off-Grid Workaround

ERCOT's 418 GW of pending large-load requests across 500 projects is the headline number, but only 34 of Texas's 254 counties have received five or more requests. That's a siting signal: the rest of the map is open, and developers who file blind will inherit whatever queue position remains. Pablo Vegas called the scale unprecedented in ERCOT history. Most projects won't materialize, but even a fraction reshapes generation and transmission policy.

The workaround is already visible nationally. xAI's Memphis facility came online in months on portable gas. Meta's Socrates campus in New Albany deploys two off-grid gas plants this year. Oracle and OpenAI are building off-grid gas for Stargate Jupiter in New Mexico. Microsoft is commissioning Three Mile Island's 835 MW unit for 2028. Risk: developers still banking on grid-only strategies are competing for the same scarce interconnection slots while self-supplied competitors break ground.

[1]·[4]·[5]

Water

Drought Math Becomes Site Selection Math

Two-thirds of the 809 planned U.S. data centers are slated for drought-affected regions, per Guardian analysis of Cleanview and federal drought data. Pecos and Carson counties, both recently in drought, are slated for two of Texas's largest new builds. National data center water demand quadruples from 17 billion gallons in 2023 to 73 billion by 2028. Researchers project data centers could hit 9% of Texas water use by 2040.

The harder number sits upstream: global data center electricity generation required nearly a trillion gallons of water in 2025, with AI's share projected to double to 400 billion gallons by 2030. Closed-loop cooling helps at the margin, but the embedded water in the generation mix dominates. Risk: developers treating water as a cooling problem will lose to developers treating it as a power procurement problem, picking wind-heavy grids and signing offset agreements before permitting.

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Politics

Abbott's Pivot Lands in a National Pattern, Texas Stays the Better Address

Abbott's letter has hard deadlines (July 17 memo, July 31 transmission cost recommendations) and a 2027 legislative roadmap. Lt. Gov. Dan Patrick has ordered Senate interim study hearings this year. Notably, Abbott hasn't proposed caps, moratoriums, or transmission denials, just cost-shifting and efficiency standards disciplined developers already model.

Compare the elsewhere. New York's legislature passed a one-year moratorium on facilities 20 MW and above (Senate 44-16, Assembly 102-39), with renewable mandates climbing to 90% by 2040 if Hochul signs. New York's PSC is separately reworking interconnection for 11.9 GW of queued large loads. Utah's Stratos approval triggered hundreds of protestors and a 6,200-signature petition against a Nevada project from a Texas-based developer despite a fully closed-loop design. Risk: Texas remains the most workable jurisdiction, but only for developers who engage PUCT rulemaking now, negotiate Community Benefit Agreements before siting, and treat the 2027 session as a deadline rather than a distant date. The rules will be written. The question is who's in the room.

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Sources we cited

9 articles across 9 publishers · 320 reviewed today

[1]Houston Chronicle
Is your Texas county a hot spot for large data centers? Search the ERCOT data.
Jun 8, 2026·Data centers are not new to Texas, but the projects seeking to locate here in the coming years are much bigger and more numerous than ever b…
[2]E&E News
Texas governor talks tough on data centers, calls for clampdown
Jun 11, 2026·Texas Gov. Greg Abbott released a broad set of proposals Wednesday aimed at regulating the growth of data centers — months after declaring h…
[3]Yahoo News
Abbott Proposes Regulations On Texas' Booming Data Center Industry
Jun 11, 2026·Texas Gov. Greg Abbott (R) on Wednesday proposed new regulations aimed at protecting residents from the rising energy costs and environmenta…
[4]Institute for Energy Research
Data Centers Are Opposed by Over Half of Americans
Jun 10, 2026·Over half of Americans are strongly opposed to a data center being built near their home, and over half also blame rising electricity prices…
[5]WSMV
The U.S. leads the world in data centers — and nearly half of new ones are headed to the South. Here’s what to know.
Jun 11, 2026·NASHVILLE, Tenn. (WSMV) - As data centers continue to pop up across the nation, there is one area that accounts for nearly half of the thous…
[6]Mother Jones
Most New US Data Centers Are Slated for Drought-Plagued Areas
Jun 10, 2026·An aerial view of the location of the proposed Stratos Project data center near Snowville, Utah.Natalie Behring via Getty This story was or…
[7]Tom's Hardware
AI is set to consume up to 600 billion gallons of water by 2030 — rising energy consumption primarily to blame as data center power demands rise
Jun 11, 2026·As GPU power demands almost double with every generation, most water usage will come where the power is generated. Data centers consume sig…
[8]JD Supra
New York State Legislature Passes First-in-the-Nation Data Center Moratorium
Jun 10, 2026·On June 4, 2026, both houses of the New York State Legislature passed the Responsible Data Center Development Act (S10642/A11560) (the Act),…
[9]Datacenter Knowledge
New York Confronts the Data Center Boom: Balancing Growth and Grid Reform
Jun 10, 2026·Insight and analysis on the data center space from industry thought leaders. A potential legislative moratorium and landmark PSC proceeding…

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