Tuesday, June 16, 2026

Developers Foot 100% of the Wire. Ratepayers Get the Discount.

Abbott's cost-shift order lands as 75 projects worth $130 billion stalled nationally in Q1, with New York freezing permits outright and North Carolina moving to ban evaporative cooling. Texas picked pricing over prohibition, and the developers who shape the PUCT rulemaking over the next five weeks will write the cost-allocation formulas every competitor inherits.

Today's Lead

Governor Greg Abbott has handed the PUCT and ERCOT a regulatory reset with hard deadlines. In a letter to PUC Chairman Thomas Gleeson and ERCOT CEO Pablo Vegas, Abbott directed datacenters to fund 100% of their own electric infrastructure costs and structured interconnections so residential bills decline. Joint memo due July 17; PUC transmission-cost action due July 31.

The context makes the urgency obvious: ERCOT's queue holds more than 480 large datacenters requesting access through 2032, each pulling power equivalent to roughly 18,750 households. The rules for that queue are about to be rewritten.

[1]

Politics

Texas tightens the screws while other states slam doors

Abbott's July deadlines arrive as Data Center Watch counts 75 projects worth over $130 billion stalled or scrapped in Q1 2026 alone, matching all of 2025. Active opposition groups doubled to 833 across 49 states. New York passed a one-year permit freeze on large datacenters. North Carolina's SB 730 would largely prohibit evaporative cooling and force developers to contractually cover infrastructure costs. More than two dozen NC communities have already adopted moratoriums.

Texas isn't blocking. It's pricing. Abbott's cost-shift framing (developers pay, ratepayers benefit) creates a workable path where New York's freeze creates none. Developers who engage the PUCT and ERCOT during the five-to-six week rulemaking window will shape the cost-allocation formulas that govern every project behind them in the queue. The ones who wait will inherit rules written by competitors.

[1]·[2]·[3]

Power

Speed-to-power is now an institutional problem, not a generation problem

AEI's framing cuts through the megawatt math: utilities don't have the tools to absorb large, fast, mobile, uncertain loads. PJM needs eight years to bring new capacity online, per RMI. The institutional response is splintering into three tracks. Off-grid gas (57 plants, 73,000 MW nationwide per CleanView, including Meta's Apollo station permitted in under three months in Ohio). Solid-state transformers (Heron Power $140M Series B, DG Matrix $60M Series A, Amperesand $80M Series A, Eaton's acquisition of Austin-based Resilient Power Systems). And demand flexibility (Emerald AI's Conductor deploying live at a Digital Realty facility in Virginia with Nvidia).

The off-grid gas path solves procurement and breaks politics. Ohio's 45-day exemption process kept Meta's customer identity obscured as "Liames LLC" until construction started. Texas developers should expect Abbott's cost-shift order to push more projects toward self-supply, but Ross versus Lacy Lakeview shows what happens when secrecy meets community proximity. Sequencing matters more than speed.

[4]·[5]·[6]·[7]·[8]

Water

Scarcity is now the filter, not the obstacle

Oracle and OpenAI's $165 billion Project Jupiter in Doña Ana County pivoted from water-intensive gas turbines to fuel cells and committed to 11 million gallons annually of recycled non-potable water, roughly 30,000 gallons per day. That's a dramatic reduction from initial million-gallons-daily projections, driven by 71% of New Mexico now sitting in moderate drought. In Finney County, Kansas, Triple Oak Power is pitching a 6,000-acre campus that would cut current irrigated-farm water use by 81%, from 3.2 billion gallons annually to 600 million. In Callaway County, Missouri, Crusoe's closed-loop design pegs annual use at 1.4 million gallons, less than a local golf course.

Developers who frontload water design win permits. Developers who don't get Natelli Investments' Wake County outcome: 250 MW campus shelved after county zoning changes and sustained pushback over water and infrastructure cost-shifting. Two-thirds of planned U.S. datacenters sit in areas that experienced drought in the past year. Water planning is now site-selection criterion number one.

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Sources we cited

11 articles across 9 publishers · 325 reviewed today

[1]San Antonio Express-News
Gov. Abbott directs regulators to protect Texans in managing data center growth - San Antonio Express-News
Jun 16, 2026·Texas Gov. Greg Abbott speaks on March 27 at the Conservative Political Action Conference in Dallas. Abbott is right to call on the Public U…
[2]Fortune
Data center hate is snowballing, and construction setbacks in the first three months of 2026 have already exceeded last year’s, report finds
Jun 16, 2026·Earlier this year, Natelli Investments, a large-scale development firm, withdrew its annexation and rezoning applications for a proposed dat…
[3]WRAL
Inside North Carolina's data center boom: Where does the water go?
Jun 15, 2026·More than two dozen North Carolina communities have adopted moratoriums or zoning restrictions on data centers as concerns grow over noise, …
[4]AEI
You Can’t Just Plug in a Data Center - American Enterprise Institute
Jun 15, 2026·Most of us experience electricity as a subscription service. We move in, call the utility, set up an account, and expect the electrons to ar…
[5]AEI
Data Centers, Flexibility, and the Architecture of the Grid - American Enterprise Institute
Jun 15, 2026·Flexibility is the buzzword du jour in electricity. Don’t read that as criticism; buzzwords often become buzzwords for the same reason that …
[6]MIT Technology Review
Want to get a data center online quickly? Give it some flex.
Jun 16, 2026·As the data-center boom puts pressure on the grid, some companies say the answer isn’t just more power plants but software that dials down c…
[7]Data Center Richness
Solid State Transformers Could Reshape AI Infrastructure
Jun 16, 2026·Three companies building next-generation power conversion technology have raised a combined $280 million in the past year, while another has…
[8]Mezha
Off-grid gas plants are rising to power AI data centers, alarming nearby communities
Jun 16, 2026·Neighbors discovered a secret gas power plant built to feed a Meta data center, raising fears about air quality and local oversight. The per…
[9]Fortune
New Mexico is in a historic drought. Oracle and OpenAI designed their newest data center with that in mind
Jun 15, 2026·New Mexico’s forests are dying faster than at any time on record. In 2025, the state mapped 209,000 acres of trees killed by bark beetles an…
[10]Topeka Capital-Journal
Can a massive data center actually save Kansas water? - The Topeka Capital-Journal
Jun 16, 2026·FINNEY COUNTY — Ann Gravatt and Jesse Gronner shook hands, offered food and fielded questions from people around the region curious or skept…
[11]News Tribune
Fulton residents weigh pros, cons of proposed data center
Jun 16, 2026·Fulton community stakeholders gathered for a lengthy data center information meeting Monday evening. More than 150 Callaway County resident…

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