Saturday, July 25, 2026
Abbott Sets Five Site Standards, and East Texas Is the First Test
Diode Ventures withdrew its East Texas project days after Abbott directed state agencies to weigh grid reliability, bill-lowering interconnections, cost recovery, water efficiency, and setbacks before approval. Developers who already carried contracted tenants and secured water offsets aren't scrambling to meet the five criteria; they're positioned to pick up what stalls.
Today's Lead
Texas just set the enforcement bar for the entire industry. Diode withdrew its proposed data center near Cedar Creek Lake in Henderson County after concluding the site couldn't meet the state's hardening development standards, and Governor Greg Abbott framed the exit as proof that Texas will host growth only from developers who put grid reliability, water efficiency, and community protection first. Abbott laid out five non-negotiables for future projects: interconnections that lower residential bills, full infrastructure cost recovery from the developer, added generating capacity, water-efficient cooling, and neighborhood setbacks with noise mitigation.
NATIONAL CONTEXT
The ratepayer-protection push is now a 22-governor coalition. North Dakota Gov. Kelly Armstrong joined the Trump administration pledge requiring operators to fully fund their own generation, network upgrades, and reserved capacity, and nearly 200 utilities and data center companies have signed the broader version, including American Electric Power, NextEra, Duke, Southern Co., Amazon, Google, Microsoft, Meta, and Oracle.
The pledge doesn't stop rate hikes. Utilities are claiming billions in data center savings while filing for $18.6B in rate increases this year, per analysts cited by Latitude Media. DTE projected $1.7B in "affordability benefits" from its Google contract, then won $500M in Michigan rate hikes since 2025 and requested another $500M. In Wisconsin, Democrat governor candidate Francesca Hong is running against data center incentives outright, invoking the state's $4.5B Foxconn deal and calling the Port Washington facility's projected 50% property-tax cuts "developer estimates." Descriptive takeaway: the affordability fight is national, and jurisdictions that codify separate rate classes early attract disciplined developers.
Power
The Execution Test Rewards Contracted Cash Flow and Locked Generation
Abundant demand, tightening execution. Alphabet raised its 2026 capital forecast to $195-$205B, more than double 2025's spend, but a power contract and a site no longer move a project alone. Hut 8 signed a second 15-year lease at its Nueces County Beacon Point campus for 352 MW, bringing signed IT capacity to 704 MW worth $19.6B in base-term value against 1,000 MW of AEP Texas capacity. A signed lease with an investment-grade tenant is now the most bankable asset in the space. Bottom line: developers financing on power access alone, without contracted tenants, will find the capital markets unforgiving.
Grid
West Texas Self-Supplied Campuses Move to Solve the Queue
Behind-the-meter is the West Texas capacity story. Cardinal Data Power, Dallas-based and Hunt-affiliated, secured a letter of intent for 750 MW of initial capacity on 3,500+ acres with first power targeted for 2027, projecting 1 GW by 2029; Empery Digital just put $20M into an $70M Series A. Liberty Energy and PowerBridge, per an early-stage release, formed a joint venture for the Alpha Digital Campus, phase one over 300 MW of on-site generation starting Q4 2027 and a 2 GW full build-out. Self-supplied power solves grid sequencing but trades queue risk for fuel supply, commodity price, and execution risk on generation at a scale few have proven. Bottom line: watch how many tenants actually anchor before treating 5 GW claims as capacity.
Policy
Private Generation Is a Bridge, Not the Destination
BloombergNEF now projects data center load hits 194 GW by 2035, roughly 20% of US power and nearly double its December forecast. That gap pushes developers toward private generation: xAI bought APR Energy's 1 GW-plus of deployable units, Meta ran modular turbines in Ohio, Google proposed its own plant in Nebraska. But turbines and the technicians to run them are in short supply, leaving a projected 19 GW shortfall even at record buildout. xAI's Memphis site now faces a NAACP-led suit over unpermitted turbine operation. Bottom line: secure interconnection rights early and treat behind-the-meter as the bridge, because the equipment supply won't stretch to permanent substitution.
Water
Coupled Water-and-Power Sequencing Is the New Site-Selection Discipline
Water and power can't be modeled independently anymore. In the Roanoke Valley, early reports describe a 43% rainfall deficit with Smith Mountain Lake, a hydroelectric source, drawn down to keep the grid online while Google's Botetourt campus draws millions of gallons daily; AEP leans one-third on gas and 17% on stressed hydro. In Nebraska, Monolith's 35 MW Crusoe-partnered facility projects 770,000 gallons annually and is proposing closed-loop cooling to satisfy the Lower Platte South NRD before a September 7 board vote. Bottom line: a campus that locks power without securing water offsets or generation diversity builds in structural vulnerability and invites organized opposition.
Politics
EPA's Minor-Permit Proposal Adds a Texas Variable to Watch
EPA is proposing to let states set their own notice-and-comment rules for minor air permits, the category data centers use for diesel generators and gas turbines. For Texas, that would hand TCEQ authority to rewrite public participation procedures; written comments run through August 21. Advocates including Air Alliance Houston warn the shift could narrow protest opportunities, while EPA says any TCEQ rule change would go through its own rulemaking. The uncertainty is the point: rules governing minor permits could move materially depending on TCEQ's next steps. Bottom line: developers should track the August 21 comment close and model permitting under both current and revised participation rules.
Capital
Megaproject Site Competition Intensifies Outside the Clusters
OpenAI's $20B Project Camellia near Savannah, 4.4M square feet across four buildings on 2,600 acres, has it acting as lead developer for the first time, with Georgia Power supplying 3.2 GW under a 25-year deal that reserves up to 1 GW of curtailment. Georgia won it without ERCOT-style queue constraints, but the utility is fielding a wave of requests and has proposed $16B for 9.9 GW of new capacity over five years; one tenant is eating a meaningful slice. Separately, FracTracker data shows rural counties now hold 12% of in-progress projects, double their share of operating capacity, often with thin negotiating staff. Bottom line: Texas developers competing on speed should model full-cycle timelines, ERCOT queue, TCEQ water, and local land use, because a megaproject moves fast only when every regulator sees it coming.
Sources we cited
15 articles across 15 publishers · 407 reviewed today
- [1]YahooData Center Developer Withdraws East Texas Project After Failing To Meet Abbott’s StandardsJul 23, 2026·A proposed data center development near Cedar Creek Lake in East Texas has been withdrawn after Gov. Greg Abbott said the project failed to …
- Abbott Directs Agencies To Stop Data Centers From Raising Your Electric BillJul 24, 2026·Gov. Greg Abbott released a response on Friday from the Public Utility Commission of Texas and the Electric Reliability Council of Texas out…
- [3]InForumPort: Gov. Armstrong signs data center 'rate payer protection' pledgeJul 23, 2026·MINOT — Gov. Kelly Armstrong has joined 21 of his counterparts across the nation in signing a policy pledge supporting data centers, but als…
- Why energy bills may keep rising, even as utilities join Trump’s AI ratepayer pledgeJul 23, 2026·The White House is taking credit for customer savings. But real change may ultimately be up to states. The post Why energy bills may keep ri…
- Q&A with governor candidate Francesca Hong: End data center handoutsJul 24, 2026·Editor's Note: The Milwaukee Journal Sentinel asked the leading Republican and Democratic candidates for governor to answer ten questions ab…
- The Gigawatt Buildout Faces the Execution TestJul 24, 2026·Demand remains abundant across the data center and AI infrastructure market. Alphabet has raised its capital spending forecast again. OpenA…
- Empery Digital invests $20m in Cardinal Data PowerJul 24, 2026·Investment supports proposed West Texas campus with plans to scale beyond 5GW Bitcoin treasury firm Empery Digital has invested $20 million…
- [8]citybizLiberty Energy, PowerBridge Form Joint Venture for West Texas Data Center CampusJul 23, 2026·Liberty Energy and PowerBridge have formed a strategic joint venture to develop powered data center campuses, beginning with a planned 2-gig…
- [9]Canary MediaData center demand is soaring, and off-grid gas won’t fix the problemJul 24, 2026·This analysis and news roundup come from the Canary Media Weekly newsletter. Sign up to get it every Friday. It’s no secret that data cente…
- The Power Behind the Pump: The Twin Infrastructure Crises of the Roanoke ValleyJul 22, 2026·This is so far the second-driest water year on record for the region Author: Roanoke Rambler Staff, Hart Fowler Lead Published: 8:00 AM ES…
- Hallam residents pack town hall for Monolith's proposed data center expansionJul 24, 2026·A line stretched out the Hallam auditorium as residents packed into the building Thursday evening for a town hall regarding a proposed data …
- [12]grahamleader.comProposed EPA rule could weaken Texans’ voice on certain air permits used by data centersJul 23, 2026·The Stargate data center in Abilene on May 2, 2026. The U.S. Environmental Protection Agency is proposing to change its rules for permits i…
- [13]AJC.comTech giant OpenAI plans to build $20 billion data center near Georgia coastJul 22, 2026·Editor’s note: This article was updated late Wednesday after additional details were made public in a regulatory filing. RINCON ― Georgia’s…
- [14]PropmodoAI Giants Take Direct Control of Data Center Development and Power SupplyJul 23, 2026·OpenAI will build a $20 billion data center campus near the Port of Savannah in Effingham County, Georgia, marking the company’s first proje…
- Mapping rural data center development finds growing oppositionJul 24, 2026·Washington, D.C.’s metropolitan area has long hummed with data centers. The region, which encompasses much of Northern Virginia, has become …