Saturday, June 27, 2026

Anchors Are Building Their Own Power to Skip the Texas Queue

The fastest tenants in Texas have stopped waiting for the queue, and Chevron's 2.67 GW Project Kilby with Microsoft shows what self-supplied power looks like at hyperscale. With ERCOT's backlog past 300 GW, speed to power now separates the anchors who lock generation early from the ones counting weeks in line.

Today's Lead

Texas now faces at least 248 planned data center projects, and ERCOT has logged 439 gigawatts of grid-connection requests, 89% of them from data centers. That's roughly five times the state's all-time peak demand, against a forecast that data-center load could hit 77,965 MW by 2030, up from 9,500 MW today. The boom is real, the queue is full, and Governor Abbott has shifted from "epicenter of AI" framing to directing in June 2025 that infrastructure costs stop landing on ordinary ratepayers and recommending repeal of data-center tax exemptions.

The developers who plan power and water first will build. The ones betting on continued opacity will meet whatever the 2027 session writes.

[1]·[2]

Power

Self-supplied generation is becoming the dominant model for tenants who won't wait in the queue.

Chevron's Energy Forge One locked Microsoft into a 20-year PPA for Project Kilby, a 2.67 GW co-located gas-plus-compute facility in West Texas, targeting Final Investment Decision by end-2026 and first power in 2028. The structure keeps generation on-site, dodging West Texas transmission constraints entirely. Google's parking Texas campuses next to dedicated Intersect Power solar and storage to run behind-the-meter; Microsoft, Meta, and Amazon are each solving the same problem their own way.

The math is straightforward. With ERCOT's queue past 300 GW, on-site generation is economically rational for anchors with Microsoft's load and credit. Every lever, interconnection approvals, PUCT standards, TCEQ air review, still runs through grid operators and regulators, so speed to power, not chip access, separates winners from queue-locked losers.

[3]·[4]·[5]

Power

Grid nodes, not land, are the scarce asset, and other RTOs are using transmission as a competitive weapon.

Southwest Power Pool built a $72 million transmission project to relieve congestion at the Mathewson Substation in Kingfisher County, Oklahoma. It became a magnet instead: Houston-based Cloverleaf Infrastructure and Atlanta-based Beltline Energy are both optioning land at the 345-kV convergence. As Cloverleaf CTO Jonathan Abebe put it, "There's not many locations on the grid that can actually serve them without triggering massive transmission upgrades." FirstEnergy and ReliabilityFirst are sounding the same alarm in the East, where transformers and breakers run four-to-five-year lead times.

Here's the Texas pressure point. If SPP keeps treating transmission upgrades as site-competitiveness tools, Oklahoma captures campuses ERCOT's queue would otherwise hold by default. The open question: can ERCOT-connected utilities start thinking like SPP, or is queue position a permanent disadvantage?

[6]·[7]·[8]

Water

Site selection now starts with the water question, and the data favors developers who can contextualize it.

UT Austin projects Texas data centers could consume 29 to 161 billion gallons annually by 2030, up to 2.7% of statewide supply, and 3 to 9% by 2040, potentially exceeding oil and gas. The draft 2027 State Water Plan accounts for none of it. Chevron's Kilby answers the question directly: brackish, non-potable groundwater plus engineered reuse of Permian produced water, the kind of design-stage commitment that shrinks the surface area for opposition.

The viral water claims don't even measure the same thing, the largest is roughly 2,000 times the smallest, and Lawrence Berkeley pegs 2023 U.S. data-center use at 228 billion gallons, mostly tied to electricity generation. Developers who bring secured supply, recycling, or documented offsets to county hearings and PUCT filings clear permits. Those treating cooling water as an afterthought meet communities that have already organized.

[2]·[9]·[10]

Sources we cited

10 articles across 10 publishers · 246 reviewed today

[1]Houston Public Media
Hundreds of data centers are coming to Texas. Here’s what you need to know
Jun 26, 2026·Texas is experiencing an AI-driven data center boom with at least 248 projects planned statewide. Here’s what to know about the industry’s r…
[2]Yahoo
Hundreds of Data Centers Are Coming to Texas, and the State’s Plumbing May Not Be Ready
Jun 26, 2026·ERCOT has received grid-connection requests totaling roughly 439 gigawatts of new capacity — about five times the state's all-time peak elec…
[3]Cyprus Shipping News
- Cyprus Shipping News
Jun 26, 2026·Chevron Corporation announced that Energy Forge One LLC, a wholly owned subsidiary, has signed an agreement with Microsoft Corp. (NASDAQ: MS…
[4]McGuireWoods
McGuireWoods Advises Chevron in Landmark Power Purchase Deal With Microsoft for West Texas Data Center
Jun 26, 2026·McGuireWoods served as legal adviser to Chevron U.S.A. Inc. in negotiating an agreement between its wholly owned indirect subsidiary Energy …
[5]Tech Times
Amazon Leads AI Data-Center Power, but Google Is Closing In on Clean Energy
Jun 26, 2026·Amazon is out front in the race to secure electricity for AI data centers, according to an analysis cited by The Wall Street Journal — but G…
[6]Oklahoma Watch
A Transmission Line Built to Fix Grid Congestion Has Become Oklahoma's Hottest Data Center Address
Jun 26, 2026·Amid the farm fields of northwest Oklahoma City, a place where high-voltage power lines converge has attracted interest from two data center…
[7]The Oklahoman
Space meant to relieve power congestion is attracting data center developers
Jun 27, 2026·Amid the farm fields of northwest Oklahoma City, a place where high-voltage power lines converge has attracted interest from two data center…
[8]Datacenter Knowledge
AI Data Center Loads Rewrite the Utility Playbook
Jun 26, 2026·Utilities, grid operators, and developers say hyperscale AI data centers are forcing faster, larger‑scale transmission, interconnection, and…
[9]News 9
How much water does AI really use?
Jun 26, 2026·As artificial intelligence fuels a boom in data center construction, concerns over the facilities’ water use have become a growing point of …
[10]University of Tulsa
Data centers draining resources in water-stressed communities
Jul 19, 2024·This opinion column was written by Eric Olson, Anne Grau, and Taylor Tipton and was first published in the Dallas Morning News. Olson is an …

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