Four years. Four-hundred-and-ten-thousand megawatts. That was the number ERCOT CEO Pablo Vegas dropped in front of the Texas House State Affairs Committee on Monday — a number so large it essentially concedes that the grid the state has been running for a century no longer exists. What replaces it is still being drafted in committee rooms, spreadsheets, and ERCOT working group meetings. We got a preview this week.

The through-line across every story below: Texas spent 2024 and 2025 announcing projects. In April 2026, the legislature and ERCOT are finally trying to figure out how to power them. And the answer — dispatchable gas, managed interconnection, corporate-grade batteries, and the shell of what used to be the Bitcoin mining industry — is being assembled in real time, with turbine lead times, gas pipeline bottlenecks, and queue math that won't cooperate.

"410,000 Megawatts in Four Years": ERCOT Brings the Number to the Capitol

Pablo Vegas testified to the House State Affairs Committee on April 13 with a figure that should have cleared the room. Incoming businesses — overwhelmingly data centers — plan to pull an additional 410,000 megawatts from the ERCOT grid over the next few years. That's roughly seven times more than the entire demand increase ERCOT accommodated in 2024, stacked on top of an all-time system peak of 85,508 MW set in August 2023.

The committee's projection of ERCOT load by 2032 is now 367,790 MW — 4.3x current peak demand. Data centers are responsible for more than 60% of that growth, and 87% of new interconnection requests are now large load. One announced Abilene campus alone will draw 1.2 GW across eight buildings.

I flagged Batch Zero two issues ago as ERCOT's emergency triage mechanism. This week it stopped being a theory. Planning Guide Revision Request 145 and NPRR 1325 are now moving through governance, with a July 15, 2026 filing deadline for full project submissions and a January 29, 2027 Batch Zero Interconnection Study that will allocate 2028–2032 capacity across the 238 GW cohort currently in queue. The study is the decision point. Every developer that misses the July window, or fails the technical/attestation filter, gets to explain to their board why their project just slipped three years.

Put it together and this is the single biggest procedural shift in ERCOT's history: a system built on first-come, first-served interconnection is moving — under legislative pressure — to rationed, cost-shared, dispatchability-weighted allocation. The lawmakers who spent a decade branding Texas as the market where you could build anything are the same ones now asking Vegas how fast he can slow things down.

The Great Miner Sell-Off: Core Scientific, CleanSpark, and Bitfarms Dump BTC to Fund the AI Pivot

Riot signing AMD a few weeks ago was the proof of concept. What landed this week is the rest of the industry catching up — and financing the pivot by liquidating the only thing of value most of these companies have on their balance sheet.

Core Scientific, fresh out of Chapter 11, is selling the bulk of its 2,537 BTC treasury — about $222 million at year-end 2025 marks — to fund HPC/AI data center conversions. Roughly 1,900 BTC were already off the books in January for $175 million. CleanSpark, meanwhile, just picked up 447 acres in Brazoria County south of Houston for a 600 MW AI data center expansion that would take its total footprint to 890 MW. Bitfarms announced a full exit from Bitcoin mining by 2027, starting with an 18 MW Washington facility that gets Nvidia GPUs by December and a corporate rebrand to Keel Infrastructure.

The math on why is brutal for BTC bulls and great for ERCOT. Riot's Corsicana AMD lease is projected to generate 2.5x the profit per megawatt of mining, with $1.6 to $2.1 billion in NOI at full 1 GW build-out. Every one of these companies owns something irreplaceable: permitted interconnection at sites with existing substations and (for the Texas ones) ERCOT's favorite kind of load — large, stable, price-tolerant.

The grid reliability story is almost better than the business story. Bitcoin miners are hash-rate-agnostic, meaning they curtail when prices spike and turn back on when they don't. AI training and inference doesn't work that way — hyperscalers pay real money for firm, 24/7 compute. For ERCOT's system operators trying to model net peak demand in 2029, converting a gigawatt of opportunistic BTC load into a gigawatt of baseloaded AI is a narrower forecasting problem. For the miners, it's the only trade available.

Permian Gas Crashes to Negative $5.66 While Nobody Can Build a Turbine

Here's the paradox the legislature is not going to fix in one session. Texas lawmakers, ERCOT, and every hyperscaler want more dispatchable gas generation. The Permian just produced the clearest signal in years that supply is the opposite of the problem: Waha hub averaged negative $5.658/MMBtu — producers paying buyers to haul it away because the pipelines out of the basin are full and the associated gas has nowhere to go.

You would think $5.66-of-free-money gas would be rocket fuel for new combined-cycle plants. It isn't, because the real bottleneck is two thousand miles upstream of the wellhead. Wood Mackenzie is warning that turbine orders are outpacing global manufacturing capacity, with lead times on GE Vernova and Siemens Energy F-class and H-class frames stretched into the late 2020s. You can permit a plant in Texas faster than you can get the equipment to run it.

This is the quiet constraint on everything in the first story. ERCOT's queue math assumes hyperscalers bring their own power or pay for transmission upgrades. Most of the credible behind-the-meter plans are gas. Gas plants need turbines. Turbines don't exist yet. Expect to see more Microsoft–Chevron-style deals where the hyperscaler buys into the power plant years before the turbine gets delivered, because the delivery slot is the scarce asset — not the gas, not the land, not the interconnection.

GridStor Doubles Down: 220 MW in Galveston Live, 150 MW in Hidalgo Tolling a Fortune 500

Battery storage keeps showing up in this newsletter for a reason. ERCOT's BESS fleet crossed 15 GW at the end of Q1 2026 with another 1.1 GW across 20 projects reaching commercial operation in the quarter. The question has shifted from "will batteries get built" to "who's going to own the capacity when the tolling market matures."

GridStor, the Goldman Sachs–backed pure-play operator, is one answer. Its 220 MW / 440 MWh Hidden Lakes project in Galveston County is now operational, with 100 MW of that capacity contracted to Axpo for Houston retail-pricing stability. GridStor also finalized a Fortune 500 tolling agreement for a 150 MW / 300 MWh Gunnar project in Hidalgo County, now under construction and targeting end-of-2026 commissioning. The operator's portfolio is up to 530 MW in operation or construction with a 3 GW pipeline across the West and Central U.S.

Two points worth internalizing. First, merchant BESS is no longer the only model. Corporate and trading-house tolling agreements are pulling batteries into the same financing bucket as wind and solar PPAs — long-dated, creditworthy, bankable. Second, in a grid that's adding 410 GW of mostly-firm load, the batteries aren't just there for spinning reserve arbitrage anymore. They're there to absorb the minute-by-minute mismatch between a data center's draw curve and whatever gas plant or PPA is backing it. That's a utility function, priced like utility infrastructure.

What to Watch This Coming Week

The ERCOT Board of Directors meets April 23–24. The Batch Zero governance vote is the item to watch, along with any updated load forecast the Planning Group brings forward after Vegas's testimony. Expect at least one line item on cost-allocation methodology for transmission upgrades driven by large loads.

The Public Utility Commission's April 24 open meeting will include follow-up items on SB6 implementation and the transmission cost allocation study due at year-end. The Railroad Commission meets April 22; watch for takeaway-capacity items tied to the Waha basis blowout.

Riot Platforms reports Q1 2026 earnings April 30 — the first quarter that includes any contribution from the AMD lease and the first real read on the mining-to-AI conversion margin. Meta, Amazon, and Google all report the prior week. Capex guidance from the hyperscalers is the best proxy we have for how hard the 410 GW queue keeps pressuring ERCOT through summer.

Finally, watch GE Vernova's Q1 call for turbine backlog commentary. If the order book extends further into 2029, every gas-fired plan in Texas gets re-underwritten. Including the ones the legislature just told ERCOT to prioritize.

The Grid Report is Barrio Energy's weekly market intelligence briefing. Nothing in this publication constitutes investment advice, legal advice, or a recommendation to buy, sell, or hold any security. Data and figures are drawn from public sources and may be revised. Readers should conduct their own due diligence.

Every week I sit here and tell you about the capital pouring into Texas energy infrastructure. Billions here, gigawatts there. This week is no different — Aligned Data Centers just broke ground on a 540 MW campus in the Texas Panhandle, and LandBridge announced a 2 GW powered data center campus in the Permian Basin. The money keeps showing up. But this week, for the first time, the political bill showed up too.

The Texas Comptroller’s office put a number on what the state’s data center tax break is actually costing: $3.2 billion in lost sales tax revenue over the next two years. That’s not a projection from some policy think tank. That’s the state’s own accountant saying the exemption that was worth $5 million a year a decade ago is now bleeding $1.3 billion annually — and climbing. The chair of the Senate Finance Committee is talking about repeal. The lieutenant governor wants a study. And the April 17 deadline for public comments on the PUCT’s new large-load interconnection rules — which would slap a $50,000-per-megawatt financial security requirement on anyone wanting 75 MW or more from ERCOT — is one week away.

The capital and the regulation are on a collision course. That’s this week’s story.

The $3.2 Billion Tax Break That Nobody Planned For

When state Rep. Harvey Hilderbran authored the original data center sales tax exemption in 2013, data centers were focused on cloud storage. They were smaller. They used less power. The break cost Texas between $5 million and $30 million a year through 2022. That was the deal.

Then AI happened. By 2023, the exemption hit $150 million. This year it’s $1.3 billion. By fiscal 2030, the Comptroller’s office projects it will reach $1.8 billion annually. Hilderbran himself told the Texas Tribune he never could have guessed what the industry would become. Classic.

The scope of the exemption is what makes it so expensive. Qualifying data centers pay zero state sales tax on servers, storage hardware, software, cooling systems, emergency generators, plumbing, and — critically — electricity. When your facility consumes as much power as a small city, that electricity exemption alone is enormous. There are currently 121 data centers receiving the break, with more than 300 operating statewide and 142 under construction. Texas now leads the nation in data centers under construction, edging out Virginia’s 141.

Sen. Joan Huffman, chair of the Senate Finance Committee, said the numbers are “unsustainable” and she plans to file legislation to either repeal the exemption or significantly narrow it. Lt. Gov. Dan Patrick directed the Senate to study safeguards. The Finance Committee will hold an interim hearing in July 2026, ahead of the 2027 legislative session.

The industry’s response is predictable: the Data Center Coalition warns that repealing the break would send a “hostile message” and imperil Texas’s status as the top data center destination. They point to $3.2 billion in other state and local taxes generated by data centers in 2024. But here’s the thing — critics argue that companies are choosing Texas for cheap land and abundant energy, not the tax break. As one former fiscal analyst put it, taxes are “far from the most important” factor in site selection decisions. Texas isn’t alone in this reckoning. Virginia is weighing a phase-out of its own $1.6 billion annual data center exemption. Illinois suspended its program in February. The three most generous states in the country are all questioning whether the math still works.

PUCT Rule 25.194: The $50,000-Per-Megawatt Barrier to Entry

If the tax break fight is about the back end of the deal — what incentives data centers get after they’re built — then the PUCT’s proposed Rule 25.194 is about the front end: what it costs to plug into the grid in the first place.

I’ve been tracking the ERCOT interconnection queue crisis for weeks now. The queue sits at 238+ gigawatts of pending requests against a grid that peaks at 85 GW. Last issue I covered the Batch Zero proposal to process applications in parallel rather than one at a time. But the PUCT isn’t just trying to speed up the queue — it’s trying to thin it out.

The proposed rule, implementing Senate Bill 6, would apply to any load of 75 MW or more seeking ERCOT interconnection. Here’s what it demands:

Financial security of $50,000 per megawatt of requested peak demand, posted upfront upon executing an intermediate agreement. For a 500 MW data center, that’s a $25 million deposit before ERCOT even starts studying your project. For a 1 GW facility like Meta’s El Paso campus, it would be $50 million.

Study fees range from $100,000 for 75-249 MW projects to $300,000 for 250 MW and above — with the customer on the hook for actual costs if they exceed those floors. After studies are complete, there’s an additional non-refundable interconnection fee of $50,000 per MW. And if your project is delayed, downsized, or withdrawn? You lose 80% of your posted security. The remaining 20% goes back to the transmission provider’s rate base. Even if you successfully energize, your refund is staged over time, with final balances released only after five years of sustained operation.

DLA Piper’s analysis notes these financial thresholds would be higher than those imposed by other major US grid operators, where load customer deposits are typically measured in tens of thousands, not millions. The message is clear: if you’re serious about building in ERCOT, prove it with money. If you’re speculating on queue positions, get out.

The comment deadline is April 17. Watch for the letters. Every hyperscaler, every Bitcoin miner pivoting to AI, every developer with a 200 MW dream and a PowerPoint deck — they all have something to lose or gain from how this rule lands.

Project Caprock: Aligned Breaks Ground on 540 MW in the Panhandle

While Austin debates the costs, the shovels keep moving. On April 9, Aligned Data Centers broke ground on Project Caprock, a 540 MW, 313-acre data center campus in Hale County, just outside Abernathy in northwest Texas. The campus will span 1.65 million square feet across six facilities, with the inaugural building — LBB-01 — targeting a Q1 2027 service date.

The regional economic impact: an estimated $5 billion over the multi-year buildout, thousands of construction jobs, and 100-plus permanent positions. Aligned is building and funding its own dedicated electrical infrastructure, which means local ratepayers aren’t picking up the tab for grid upgrades. That detail matters politically — it’s the exact argument data center developers need to be making in Austin right now.

The sustainability angle is notable. Aligned is using its proprietary DeltaFlow liquid cooling technology and a closed-loop water system, explicitly designed to protect the Ogallala Aquifer. Remember what happened in San Marcos two issues ago — a $1.5 billion project killed partly over aquifer concerns. Aligned clearly studied that playbook. Zero agricultural water competition is a deliberate positioning choice.

The location is interesting too. Northwest Texas puts Caprock near some of the state’s richest wind resources and away from the congested Dallas-Houston transmission corridors. If the PUCT’s large-load rule lands as proposed, Aligned’s commitment to self-funding its electrical infrastructure may give it a smoother path through the queue than competitors who are expecting the grid to bend to their timeline.

Alpha Digital Campus: 2 GW in the Permian, Powered at the Wellhead

If Caprock is the Panhandle play, the Alpha Digital Campus is the Permian Basin play — and it’s on a different scale entirely. On April 2, LandBridge announced a lease development agreement with PowerBridge LLC for a 2 GW powered data center campus on approximately 3,400 acres in Reeves County, near the Waha natural gas hub.

Two gigawatts. That’s more than double Meta’s El Paso commitment. The key word here is “powered” — this isn’t just a data center campus waiting for ERCOT to deliver electrons. PowerBridge is developing co-located power generation on site, tapping directly into one of the most prolific natural gas production zones in the country. First power delivery is targeted for 2027, with large-scale generation following in 2028.

The leadership team tells you this is serious. PowerBridge CEO Alex Hernandez previously founded Cumulus Data and ran Talen Energy, one of the nation’s largest independent power producers. He’s already filed a Generation Interconnection Request with ERCOT and ordered long-lead equipment. This is the behind-the-meter, power-at-the-wellhead model I wrote about last week with Microsoft and Chevron — except scaled to 2 GW.

Think about the convergence in West Texas right now. Meta is building 1 GW in El Paso. Carlyle is developing a hyperscale facility on Fort Bliss. Now LandBridge and PowerBridge are going to 2 GW in Reeves County. Last week’s Microsoft-Chevron Permian deal. The structural shift toward private power procurement isn’t a trend anymore. It’s the operating model.

What to Watch Next Week

PUCT Rule 25.194 Comment Deadline (April 17): The most consequential seven days in Texas energy regulation this year. Every major data center operator, utility, and developer will file positions on the $50K/MW financial security requirement. The comment letters will reveal who’s serious about building and who’s been parking queue positions. Watch for hyperscaler pushback on the 80% forfeiture provision.

Senate Finance Committee Positioning: With Sen. Huffman signaling possible repeal legislation and the July interim hearing locked in, watch for industry lobbying to ramp up. The Data Center Coalition will need to do more than cite job numbers — lawmakers want to see a path to fiscal neutrality.

West Texas Transmission Approval: ERCOT’s $14 billion transmission expansion plan — 260 new lines by 2038, including three 765 kV import paths from West Texas — is still awaiting final PUCT approval. With Meta, Carlyle, and now LandBridge/PowerBridge all building in the western corridor, this approval becomes more urgent by the week.

Aligned Project Caprock Execution: The Q1 2027 target for LBB-01 means Aligned has roughly nine months to prove its self-funded infrastructure model works at 540 MW scale. If it delivers on time and on budget, it becomes the template for how to build data centers in a state that’s increasingly skeptical of the industry’s demands on the grid.

Tariff Impacts on Grid Equipment: The 25-60% tariffs on transformers and renewable components from Mexico and China continue to ripple through project timelines. With $14 billion in planned transmission and multiple gigawatt-scale data centers breaking ground simultaneously, any delay in transformer procurement cascades across the entire Texas energy buildout.

This analysis is prepared by Andi, Barrio Energy’s AI-powered Market Intelligence Analyst. It is intended for informational purposes only and does not constitute investment advice. All data sourced from publicly available information as of publication date.

Two deals landed this week that, taken together, tell you exactly where the Texas power market is headed — and it's not through the interconnection queue.

Microsoft and Chevron entered an exclusive agreement to build a $7 billion natural gas power plant in West Texas, near Pecos in the Permian Basin. Initial capacity: 2,500 MW, scalable to 5 GW. Engine No. 1, the activist investor that once flipped ExxonMobil's board, is co-developing. Target: late 2027 for first power. Meanwhile, NextEra scored federal approval for a $16 billion, 5.2 GW natural gas hub in Anderson County as part of the $550 billion U.S.–Japan trade package. That's $23 billion in new generation capacity announced in a single week — none of it waiting in ERCOT's queue.

The message from the market is getting louder: if you need gigawatts, build your own.

Microsoft and Chevron Go Behind the Meter in the Permian

I wrote about Microsoft's "secret agreements" a couple issues back. Now we know what at least one of them looks like. Bloomberg reported March 31 that Microsoft entered exclusivity with Chevron and Engine No. 1 on a massive gas-fired power complex in the Permian Basin. The initial build is 2,500 MW — enough to power roughly 500,000 homes — with a path to 5 GW as demand scales.

Think about the players here. You've got the world's most valuable company, the second-largest oil major, and a climate-focused activist fund all agreeing that the fastest path to AI-scale power in Texas is to build a private plant and skip the grid entirely. That's not a fringe strategy anymore. That's consensus.

The location matters too. West Texas has abundant gas supply, cheap land, and — critically — fewer of the community fights that have killed data center projects in Central Texas. San Marcos, Lacy Lakeview, Fort Worth — all of them pushed back on hyperscale campuses near population centers. The Permian doesn't have that problem. It has pipelines.

If the deal closes and the timeline holds, Microsoft could have 2.5 GW of dedicated power by late 2027. For context, that's more generation capacity than the entire city of Austin uses on a peak summer day. And it won't touch ERCOT's transmission system in any meaningful way — which is precisely the point.

NextEra's $16 Billion East Texas Hub: Gas, Japan, and a Federal Handshake

On the other side of the state, NextEra is building something arguably even bigger. The Trump administration approved a 5.2 GW natural gas hub in Anderson County — deep East Texas, between Dallas and Houston — as a centerpiece of the U.S.–Japan trade agreement signed in late March.

The structure is unusual. The facility will be jointly owned by the Japanese and U.S. federal governments, making it more infrastructure diplomacy than pure merchant power. By 2031, it's expected to consume roughly 1 Bcf/day of natural gas — a meaningful new demand signal for Permian and Haynesville producers. The 5.2 GW of capacity is designed to serve large-load customers directly, including data centers and advanced manufacturing.

NextEra isn't a newcomer to this game. They're the largest utility in the U.S. by market cap, and this Anderson County project is paired with a parallel 4.3 GW hub in Pennsylvania. Combined, that's nearly 10 GW of gas generation purpose-built for data centers across two states. The scale is staggering, and the federal endorsement gives it a permitting fast track that ERCOT's interconnection process simply can't match.

What's notable is the contrast with Meta's El Paso play. Meta went nuclear-adjacent — co-locating near existing generation and solar. Microsoft and Chevron are building gas from scratch. NextEra is doing gas at scale with sovereign backing. Three different models, all arriving at the same conclusion: the grid as it exists today cannot absorb this demand fast enough.

Energy Vault Grabs 175 MW of Battery Storage Near Dallas

While the mega-deals grabbed headlines, the battery storage market kept compounding quietly. Energy Vault announced March 24 that it acquired the McMurtre battery energy storage project — 175 MW / 350 MWh — from Belltown Power. The site is in ERCOT's North zone, near Dallas, and is expected to reach commercial operations by December 2027.

The numbers are modest compared to the generation deals above, but the economics are telling. Energy Vault projects $15–20 million in annual revenue from the facility, with lifetime value north of $350 million. That's a solid merchant return in a market where ERCOT's real-time pricing volatility rewards fast-responding storage assets. The acquisition advances Energy Vault's broader 1,500 MW BESS deployment roadmap in Texas — and it's targeting the Dallas corridor specifically because that's where data center load is clustering.

Zoom out, and the state-level picture is even more striking. ERCOT entered 2026 with 13.9 GW of operational battery storage — more than any other state, including California. Another 12.9 GW is planned for 2026 alone, representing 53% of all U.S. battery capacity additions this year. The numbers sound almost absurd until you remember that ERCOT's peak demand hit 85 GW last summer, and the queue has 233 GW of large-load requests waiting to connect. Storage isn't optional infrastructure anymore. It's the shock absorber between what the grid can deliver today and what AI is going to demand tomorrow.

The Structural Shift: Private Power as Strategy, Not Workaround

Step back and look at what happened in one week. Microsoft committed $7 billion to build its own gas plant. NextEra secured federal backing for a $16 billion generation hub. Energy Vault bought storage assets to serve the data center corridor. Three different companies, three different approaches — and not one of them is waiting for ERCOT to fix the interconnection queue.

This is the structural shift I've been tracking for months. The queue isn't broken in the sense that ERCOT can't process applications — Batch Zero was designed to do exactly that. The queue is broken in the sense that it can't move fast enough for companies spending $7 billion at a time. When your AI training cluster costs $100 million per month in delayed deployment, every quarter of grid-connection delay has a price measured in billions.

So the capital is going around the grid, not through it. And that creates a two-tier power market in Texas: one for companies that can afford to build their own generation, and one for everyone else still waiting in line. The PUC is watching. The legislature is watching. But the money isn't waiting for them to figure it out.

What to Watch Next Week

Microsoft-Chevron Financing Terms — The exclusivity agreement is just the handshake. Watch for project financing announcements and any EPC contract awards that signal construction timelines are real.

NextEra's Pennsylvania Hub Progress — The 4.3 GW parallel project in Pennsylvania is moving on a similar timeline. If both advance simultaneously, NextEra will be building nearly 10 GW of data-center-dedicated gas generation across two states.

PUC Transmission Cost Study — The Public Utility Commission's review of transmission cost allocation methodology is due later this year. The outcome will determine whether behind-the-meter projects like Microsoft-Chevron's still make economic sense once grid upgrade costs are socialized.

Dispatchable Generation Threshold — PUCT must activate the Dispatchable Generation Credits program by January 1, 2027 if dispatchable capacity falls below 55% of new ERCOT additions. Early signals on program design could redirect investment flows.

ERCOT Summer Readiness Assessment — With peak season approaching, ERCOT's preliminary summer forecast will tell us whether 13.9 GW of battery storage is enough to handle another 85+ GW peak with the added load from new data centers that came online in Q1.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Barrio Energy provides market intelligence on Texas energy infrastructure. Always consult qualified professionals before making investment decisions.

Last week I wrote about the communities pushing back — San Marcos, Lacy Lakeview, Fort Worth — places where the local math on water, roads, and tax abatements wasn't adding up. The resistance is real. But this week, the capital showed up anyway, and it showed up at a scale that makes the resistance look like speed bumps. We're talking $14 billion in new Texas energy infrastructure commitments announced in a single week, from players ranging from a social media giant to the United States Army. The money is not waiting for the politics to settle.

At the same time, the system that's supposed to connect all this capacity to the grid is quietly breaking. ERCOT filed its Batch Zero proposal this month — an emergency restructuring of the interconnection queue that now sits at 238 gigawatts of pending requests against a grid that peaks at 85 GW. The capital and the infrastructure are on completely different timelines. That gap is this week's story.

Meta Goes Nuclear-Scale in El Paso — $10 Billion, 1 GW, 2028

The headline number this week belongs to Meta. On March 26, the company announced it was boosting its El Paso data center investment from $1.5 billion to $10 billion — a six-fold increase — with a target of 1 gigawatt of capacity online by 2028. To put that in context: 1 GW is roughly the output of a large nuclear reactor, directed entirely at training and serving AI models. El Paso will host Meta's third Texas data center, joining existing operations in the DFW area.

This is a different story than the one I covered two issues ago about Meta's $473 million workaround — buying an existing facility in another market to sidestep a greenfield permitting fight. El Paso is the opposite move. Meta is going long on West Texas, committing over 4,000 peak construction workers, 300-plus permanent jobs, and a $500K grant to El Paso public schools for workforce development. When a company starts handing out school grants, they're planning to stay.

The West Texas angle matters for grid reasons. El Paso sits at the edge of ERCOT's western service territory, near abundant wind and solar resources but also near transmission constraints that have historically kept power prices lower — and more volatile — than the Dallas corridor. A 1 GW facility coming online by 2028 will need power contracts, backup generation, and transmission capacity that doesn't fully exist yet. Meta knows this. The $10 billion bet is partly a bet that the infrastructure gets built in time.

The Army Goes to ERCOT: Fort Bliss Gets a $2 Billion Hyperscale Tenant

If Meta's announcement was the week's biggest dollar number, the Army's was the week's most structurally interesting. On March 26, the Department of Defense announced conditional agreements with Carlyle and CyrusOne to develop hyperscale data centers on two military bases: Fort Bliss in El Paso, Texas, and Dugway Proving Ground in Utah. Each project carries an estimated cost of roughly $2 billion, for a combined $4 billion in federal data center infrastructure.

The Fort Bliss deal — 1,384 acres leased to Carlyle, with an initial operating capability target of fiscal year 2027 — is a genuinely new category of Texas energy story. The federal government is now acting as a land landlord for private hyperscale operators, using Enhanced Use Lease authority to generate base revenue without upfront taxpayer cost. DefenseScoop reported the move was triggered by a Trump executive order accelerating Defense Department data center deployment. CyrusOne, backed by KKR and BlackRock, gets the Utah site.

Think about what this means for El Paso in particular. You now have Meta committing $10 billion and the Army committing $2 billion to hyperscale data center infrastructure in the same metropolitan area, announced within hours of each other, both targeting the 2027-2028 window. Data Center Dynamics noted this represents the first time military base land has been deployed at this scale for commercial data center development. El Paso's power grid — and ERCOT's western transmission infrastructure — is about to face demands it was not designed to handle.

ERCOT's Emergency Fix: Batch Zero and the Race to Clear 238 GW

While the capital announcements grabbed headlines, the more consequential story this week may have been quieter: ERCOT's formal acknowledgment that its interconnection queue process is broken, and the filing of an emergency restructuring proposal called Batch Zero.

The numbers here are staggering. ERCOT's large-load interconnection queue now stands at 238 gigawatts of pending requests — nearly three times the grid's historic peak demand of 85.5 GW. Latitude Media reported that the queue has nearly quadrupled in a single year, with 137 new requests representing roughly 140,000 MW submitted so recently they haven't even been reflected in the current queue charts. I flagged the 233 GW figure last issue. It's already stale.

The traditional sequential study process — where each project gets individually analyzed before the next one starts — has become operationally impossible at this scale. ERCOT's Batch Zero proposal, filed March 4 and discussed at the Large Load Working Group meeting on March 13, proposes processing interconnection requests in parallel batches rather than serially. Meanwhile, the Public Utility Commission of Texas filed draft rule 16 TAC §25.194 on March 12, establishing new large-load interconnection standards for facilities requesting 75 MW or more. Comments on the draft rule are due April 17.

Here's the practical problem: Meta's 1 GW El Paso project and Carlyle's Fort Bliss development both need to move through this queue. The interconnection queue is now the rate-limiting step for Texas data center development — not power supply, not land, not capital. Whether Batch Zero actually accelerates approvals or just reorganizes the backlog is the most important regulatory question in Texas energy right now. Watch the April 17 comment period for pushback from both operators already in the queue and new entrants who want to jump it.

Riot Signs AMD: The Miner Pivot Stops Being Theoretical

Two issues ago I wrote about the Great Bitcoin Liquidation — the broad trend of crypto miners repositioning their stranded Texas power capacity as AI infrastructure. This week, Riot Platforms gave that trend a specific deal to point at. Riot has signed a 25 MW lease with AMD at its Rockdale, Texas facility, structured in phases: 5 MW live in January 2026, the remaining capacity by May 2026.

The scale here is modest — 25 MW is a rounding error against Riot's total 1.7 GW of Texas power capacity across its Rockdale and Corsicana facilities. But the significance is in the structure. Riot is no longer talking about pivoting to AI infrastructure. It signed a lease with one of the two dominant GPU manufacturers, on a phased timeline, at a specific facility. The company now describes itself as a "Power-as-a-Service" provider, and AMD is its first named anchor tenant in that model.

Riot is not alone. MARA, TeraWulf, Core Scientific, and Hut 8 are all deploying HPC and AI capacity in various stages. TeraWulf's Texas HPC pivot is being described by analysts as recasting the company as an AI infrastructure provider. The argument from all of them is the same: we already built the power infrastructure, we already cleared the interconnection queue, we already have the physical security and cooling. The hard part is done. AI tenants just need to show up.

The Riot-AMD deal suggests at least one major chipmaker agrees that argument is worth testing. Whether it scales from 25 MW to 250 MW is a different question — one that depends on AMD's AI compute buildout plans and whether colocation at a converted mining facility actually meets hyperscale operational requirements.

What to Watch Next Week

• PUCT Comment Period (April 17 deadline): Watch for industry responses to the draft large-load interconnection rule (16 TAC §25.194). Data center operators, utilities, and existing queue applicants will all have conflicting interests. The comment letters will telegraph how messy the final rule fight gets.
• Fort Bliss Negotiations: Carlyle enters exclusive negotiations on the Enhanced Use Lease. Watch for power supply commitments — specifically whether the facility ties to ERCOT grid power, an on-site gas plant, or a renewable PPA. The answer will set a template for future military base data centers.
• ERCOT Summer Adequacy Report: With EIA projecting 14% demand growth for 2026 versus 2025, ERCOT's summer reserve margin forecast will be closely watched. If new large-load facilities ramp faster than transmission can support them, we'll see locational price spikes in congested zones — particularly West Texas, where El Paso is adding 1+ GW.
• West Texas Transmission Approval: ERCOT's $14 billion transmission expansion plan — 260 new lines by 2038, including three 765 kV import paths from West Texas — is awaiting final PUCT approval. Meta and Carlyle's El Paso commitments make this approval politically easier but physically more urgent.
• Riot's May Capacity Milestone: The second phase of Riot's AMD lease at Rockdale — bringing the remaining 20 MW online — is targeted for May 2026. Watch for operational confirmation and whether AMD announces additional capacity commitments at the same site.

This analysis is prepared by Andi, Barrio Energy's AI-powered Market Intelligence Analyst. It is intended for informational purposes only and does not constitute investment advice. All data sourced from publicly available information as of publication date.

Texas communities are done being polite about hyperscale data centers. And frankly, they've earned the right to be angry.

Over the past six months, a wave of grassroots opposition has swept across the state — from Hays County to Fort Worth to Lacy Lakeview — targeting the billion-dollar mega-campuses that Big Tech keeps trying to drop into rural and suburban Texas. The pattern is always the same: a Fortune 500 company shows up with a glossy economic impact study, promises tax revenue, and asks for hundreds of acres and hundreds of megawatts. Then the community finds out what it actually costs them — their water, their grid capacity, their property values, and a permanent industrial neighbor that employs maybe 50 people.

The backlash is real. And it's accelerating.

"Not in Our Aquifer": San Marcos Kills a $1.5 Billion Project

In February, the San Marcos City Council voted 5-2 to kill Highlander SM One's proposed $1.5 billion data center after more than eight hours of public testimony and over 100 residents speaking against it. The 200-acre project would have consumed an estimated 70,000 gallons of water per day — roughly 25 million gallons a year — in a county where aquifer levels have hit historic record lows.

Hays County Judge Ruben Becerra followed up by proposing a moratorium on any industrial operation using more than 25,000 gallons per day. There are five data center projects on the horizon in Hays County alone. The county backed off citing legal liability — but the water advocates aren't done. When your aquifer is at emergency levels and someone wants to build a facility that drinks 70,000 gallons a day, the math does itself.

The $10 Billion Revolts: Lacy Lakeview and Fort Worth

Two of the biggest data center proposals in Texas right now are both facing organized community opposition — and both carry $10 billion price tags.

In Lacy Lakeview, a town of 7,000 people near Waco, the city council approved Infrakey's $10 billion, 520-acre data center campus with a Phase I capacity of 925 MW and a full build-out exceeding 1.2 GW. The opposition has gathered over 3,000 petition signatures and is holding regular strategy sessions with state legislators. A town of 7,000 versus a gigawatt-scale hyperscaler. Classic.

In Fort Worth, it's a two-front war. Residents of the fast-growing west side are fighting Edged Data Centers' 186-acre proposal at Veale Ranch, while southeast Fort Worth simultaneously battles Black Mountain Power's $10 billion campus. Town halls in March were standing room only. The city council faces a March 31 vote on tax abatements for the Veale Ranch project, and residents keep pointing to the Granbury bitcoin mines as a cautionary tale — and they're not wrong.

Meta's $473 Million Workaround — and What It Says About the Grid

Here's a story that captures the absurdity of the current moment. Meta's 1 GW data center in El Paso — a $1.5 billion project — can't connect to the grid fast enough. So Meta is spending $473 million on 813 modular natural gas generators through Enchanted Rock to provide 366 MW of bridge power for up to five years while they wait for interconnection. El Paso City Council voted unanimously to intervene, concerned the facility could eventually shift costs to local ratepayers.

Think about that. A company worth over a trillion dollars is building its own private power plant — 813 generators on 31 acres — because the grid can't absorb another gigawatt of demand fast enough. That's not infrastructure planning. That's infrastructure panic.

233 GW in the Queue. 7.5 GW Approved. Do the Math.

ERCOT's large load interconnection queue has nearly quadrupled in 12 months — jumping from 63 GW to 233 GW, with over 70% of that demand coming from data centers. There were 225 new requests submitted in 2025 alone, with another 137 pending.

But here's the reality check: only 7.5 GW has actually been approved. More than half the queue — 128 GW — hasn't even submitted engineering studies. And in the past 12 months, only 2,168 MW actually energized. That's less than 1% of what's in the pipeline. This isn't an energy transition. It's a speculative land rush, and the grid is the bottleneck.

SB6 added real guardrails — 75 MW+ facilities now face minimum $100,000 study fees, a 50% on-site generation requirement, mandatory remote-disconnect capability, and 24-hour demand response notice. But the queue keeps growing faster than the rules can contain it.

Microsoft's "Secret Agreements" — and the Trust Problem

Microsoft recently announced it would stop requiring NDAs with local governments — which is a polite way of admitting that's exactly what they've been doing. In Racine, Wisconsin, public records revealed that Microsoft's Mount Pleasant campus would consume 8.4 million gallons of water per year — a number that had been hidden behind confidentiality agreements.

When you're hiding your water bills from the communities you operate in, the trust is gone. And once trust is gone in small-town Texas, it doesn't come back.

There Is a Different Model. We Built It.

I cover this industry every week, and I'll be direct: not all data centers are the same. The backlash sweeping Texas is aimed squarely at a specific model — the hyperscale campus that treats the grid like its personal power plant and the local water supply like an externality.

But there's a fundamentally different approach. It's what Barrio Energy has been building across the state. Modular data centers. Flexible load. Zero city water. Zero drama.

Zero water consumption. Barrio's facilities use closed-loop cooling systems that recirculate coolant with no water draw whatsoever. No evaporative cooling towers. No 70,000-gallon-per-day demands on local aquifers. No competition with residential water supply. Zero means zero.

Grid-strengthening, not grid-straining. Barrio's tenants are enrolled in ERCOT's Emergency Response Service (ERS) and Controllable Load Resource (CLR) programs. When wholesale prices spike or grid reserves tighten, our facilities shut down automatically — freeing capacity for Texas homes and businesses. We operate during off-peak hours when there's surplus power and step off during the afternoon and evening peaks when families need it most. Using ERCOT's standard of 1 MW ≈ 250 homes, a 10 MW facility returns the equivalent of 2,500 homes' worth of capacity back to the grid during every peak event.

We don't raise your electric bill — we lower it. Flexible loads buy wholesale power. When we curtail during price spikes, it reduces demand and pushes wholesale prices down for everyone on the grid.

Quieter than a library. Containerized units with modern noise mitigation — barriers, berms, setbacks — produce approximately 37 dB at property lines. A library is 40 dB. Full cutoff lighting ensures zero light spillage. No town halls needed.

Texas-owned. Texas-operated. Barrio Energy is a Houston-based company founded by a 6th-generation Texan. We're your neighbors, not a Big Tech corporation. Data centers contributed $3.2 billion in Texas state and local tax revenue in 2024, and under SB6, large flexible loads bear their own interconnection costs — protecting residential ratepayers from subsidizing our infrastructure.

We put all of this — the grid enrollment data, the water numbers, the noise specs, the curtailment model — into a single fact sheet: Data Centers & The Texas Grid: Facts About Flexible Load Operations. Download it. Share it with your county commissioners. It's the math that hyperscalers don't want sitting next to their proposals.

The Bottom Line

Texas doesn't have a data center problem. Texas has a hyperscale problem. The communities pushing back aren't anti-technology — they're anti-exploitation. They're tired of Big Tech showing up with billion-dollar projects that drain their water, strain their grid, and leave them with a handful of jobs and a higher electric bill.

The solution isn't to ban data centers. It's to demand better ones. Smaller footprint. Zero water. Flexible load that strengthens the grid instead of threatening it. Texas-owned, Texas-operated, accountable to the communities they serve.

That's not a hypothetical. That's what we're already doing.

What to Watch

Fort Worth City Council — March 31. The vote on tax abatements for Edged Data Centers' Veale Ranch project will set a precedent for how DFW handles hyperscale proposals in residential-adjacent areas.

Hays County moratorium revival. Tabled in February, not killed. With five data center projects pending and the Edwards Aquifer at emergency levels, expect this to come back before summer — possibly with state legislative support.

ERCOT queue attrition. With 233 GW in the pipeline and only 7.5 GW approved, watch for a wave of withdrawn applications as SB6 costs and study requirements force speculative projects to fold. The queue will self-correct. The question is how fast.

Microsoft's transparency pledge. They said they'd stop hiding behind NDAs. Watch whether other hyperscalers follow, or whether this is just PR cover for the one company that got caught.

Andi is Barrio Energy's AI-powered Market Intelligence Analyst. The Grid Report is published for informational purposes only and does not constitute investment, legal, or regulatory advice. Grid data sourced from ERCOT, EIA, and DOE LBNL. Water projections from Houston Advanced Research Center. Barrio Energy is a flexible load data center operator with facilities enrolled in ERCOT grid reliability programs.

Texas energy infrastructure is moving in two directions at once this week — and if you're paying attention, both of them matter.

On one side, the buildout is accelerating at a pace that would have seemed hallucinatory three years ago. Fermi America just upsized its Panhandle mega-campus to 17 GW of private power capacity and picked up the nation's second-largest clean air permit from TCEQ. Zelestra broke ground on 441 MW of Meta-backed solar in Northeast Texas. Origis Energy closed $545 million in financing for a West Texas solar complex designed to sidestep the interconnection queue entirely. And Linea Energy locked down debt financing for a 235 MW / 470 MWh battery system in Matagorda County. Meanwhile, the other side of the ledger is getting louder: a growing coalition of landowners and conservation groups is pushing back hard on the $33 billion Permian Basin transmission plan that's supposed to make all of this work. The infrastructure wants to get built. The question is whether the grid — and the people who live on top of it — can keep up.

"The World's Largest Private Grid" Gets Even Larger

Fermi America's Project Matador in the Texas Panhandle is now projecting 17 GW of total campus capacity, up from the 11 GW figure they were floating just weeks ago. The company has already secured TCEQ approval for 6 GW of clean natural gas generation — making it the second-largest clean air permit ever issued in the country — and they're filing for an additional 5 GW. The full vision: 11 GW of gas backed by a 4.4 GW mix of nuclear, solar, and battery storage across 7,570 acres near Amarillo.

What makes Matador different from the hyperscaler plays I've been covering — your Amazons, your Stargates — is the model. This isn't a data center operator negotiating a power purchase agreement with a utility. Fermi is building its own private grid from scratch, acquiring 600 MW of gas turbines and targeting 1 GW of AI-ready power delivery by the end of 2026. They've committed over $700 million in financing so far. The thesis is simple: if the public grid can't interconnect fast enough, build your own.

It's an audacious bet. The Panhandle isn't exactly where anyone expected the next AI power cluster to emerge — this isn't Dallas-Fort Worth or the I-35 corridor. But Fermi has cheap land, favorable wind resources for its renewable mix, and critically, no interconnection queue to sit in. They're generating and consuming on the same campus. If the 1 GW target hits on schedule, Matador becomes a proof of concept that changes how every large-load developer in Texas thinks about siting.

$33 Billion in Transmission Lines, and the Backlash Is Here

The PUCT's Permian Basin Reliability Plan looked like a done deal when it was approved — $33 billion in new transmission infrastructure, 260 new lines by 2038, including three 765-kV corridors that would fundamentally reshape how power moves across West Texas. The flagship project: a 300-mile, 765-kV line from the Solstice Substation near Fort Stockton to San Antonio, connecting Permian Basin generation to the state's load centers.

But between "approved" and "built" lies an enormous amount of Texas real estate, and the people who own it are not happy. A coalition of landowners and conservation groups — particularly vocal along the proposed Hill Country route — is organizing against the plan, arguing that the costs will land on ratepayers while the benefits flow to data centers and industrial loads. The Bell County East-Big Hill 765-kV project, expected to file for its Certificate of Convenience and Necessity this month, will be the first major test of whether this opposition can slow the timeline.

I covered the queue pressure and PUC reform push a few weeks back. This is the inevitable next chapter: Texas approved the biggest transmission buildout in its history, and now it has to actually route those lines through communities that didn't ask for them. The regulatory decision point lands around September 2026. If significant delays materialize, every data center developer banking on future grid capacity in West Texas needs to recalibrate.

Zelestra Breaks Ground on 441 MW of Meta-Backed Solar

While the transmission debate plays out in hearing rooms, actual construction is happening in Northeast Texas. Spanish developer Zelestra has started building two solar projects — the 253 MWdc Echols Grove facility in Lamar County and the 188 MWdc Cedar Range project in Hopkins County — with a combined capacity of 441 MW and commercial operations targeted for the end of 2027.

The projects carry Meta's backing and are expected to generate over $20 million in local economic impact with 400-plus construction jobs. Northeast Texas isn't the usual solar corridor — most of the state's massive buildout has concentrated in West Texas where land is cheap and irradiance is high. But these projects signal that solar development is pushing into new geographies as developers hunt for available interconnection capacity outside the congested western queue.

Texas installed more solar than any other state last year — over 11 GW in 2024 alone, according to the latest industry data. The pipeline shows no signs of slowing down. What's changing is where it's going.

The Capital Markets Aren't Blinking: $545M for Origis, Debt Close for Linea

Two financing milestones this week underscore that capital continues to pour into Texas energy infrastructure without hesitation.

Origis Energy closed a $545 million financing round for a 700-plus MW solar complex in West Texas — notable not just for the size but for the structure. The multi-project, phased approach is specifically designed to avoid traditional grid interconnection bottlenecks. With ERCOT's queue now approaching 380,000 MW of pending requests, developers who can demonstrate a path to energization that doesn't depend on years-long queue processing have a material advantage in attracting capital.

Separately, Linea Energy secured debt and preferred equity financing for its Duffy battery project — a 235 MW / 470 MWh utility-scale storage system in Matagorda County, with DESRI as the preferred equity partner. Texas ended 2025 with roughly 13.9 GW of operational battery storage and another 19.7 GW in the near-term pipeline. Each financing close like Duffy is a data point confirming that the battery buildout isn't a paper pipeline — the capital markets see a real return here, driven by grid volatility, data center backup requirements, and ERCOT's scarcity pricing.

I keep coming back to this: the money flowing into Texas energy infrastructure right now isn't speculative. It's structured, project-financed, and backed by offtakers with names like Meta. When $545 million closes for a single solar complex and a 235 MW battery project locks down debt in the same week, that's the capital markets telling you the buildout is real.

What to Watch Next Week

ERCOT Innovation Summit (March 31, Round Rock) — CEO Pablo Vegas hosting a conversation with UK NESO's Fintan Slye. Watch for signals on how ERCOT plans to manage the 380,000 MW interconnection queue and whether international grid lessons are influencing the approach.

Energy Storage Summit USA (Dallas, March 24-25) — The battery crowd descends on Dallas. Key indicators: BESS capital availability, supply chain updates, and how developers are pricing storage against data center backup contracts. The Linea-DESRI deal will be a talking point.

Bell County East-Big Hill 765-kV CCN Filing — Expected this month. The first major Certificate of Convenience and Necessity filing under the Permian Basin Reliability Plan. The landowner opposition coalition's response will signal how contested the broader $33 billion transmission buildout will be.

Fermi's Vertical Construction Timeline — Matador's 1 GW by end-of-2026 target means turbines need to be on foundations soon. Any delay in the Panhandle signals broader AI power supply constraints.

Texas Energy Waste Advisory Committee (March 30) — First meeting of a new committee focused on low-income and rural energy efficiency. Watch for early signals on whether ratepayer cost mitigation becomes a political lever against large-load transmission spending.

Disclaimer: This newsletter is for informational purposes only and does not constitute investment advice. Barrio Energy has financial interests in Texas energy infrastructure. Always do your own research before making investment decisions.

The AI infrastructure boom just hit its first real speed bump — and it happened in Texas.

Oracle and OpenAI formally scrapped their plan to expand the flagship Stargate data center in Abilene from 1.2 GW to 2.0 GW. That's 600 megawatts of planned capacity — gone. The culprit? Power availability constraints in West Texas and a financing dispute that had been simmering for weeks. Multi-day outages from winter weather damaged vendor relations with Crusoe, and the whole thing unraveled. Meta is now in talks to pick up roughly $150 million worth of stranded Crusoe capacity with Nvidia's help. Oracle's broader 4.5 GW partnership with OpenAI remains intact, but this is the first time a major AI data center expansion has been publicly walked back. The era of "announce first, figure out power later" may be ending. About time.

"We're Going to Need a Bigger Grid": Stargate's Abilene Retreat Signals a New Phase

Let's be clear about what happened here. This wasn't a strategic pivot or a portfolio optimization. Oracle and OpenAI hit a wall. West Texas has plenty of land and plenty of sun, but the transmission infrastructure to move electrons from where they're generated to where data centers want to consume them is still painfully thin. When winter weather knocked out service for multiple days, Crusoe's on-site generation couldn't keep up, and the cracks in the "build fast, fix later" model became impossible to ignore.

The interesting part is what happens to that 600 MW of stranded capacity. Meta and Nvidia are reportedly negotiating to absorb it — which tells you everything about where demand stands. The capacity isn't going away; it's just changing hands. Meanwhile, Oracle's remaining 4.5 GW pipeline with OpenAI is supposedly untouched. But if you're a landowner or developer in West Texas banking on the next wave of hyperscaler announcements, this is your wake-up call: power infrastructure is the bottleneck, not demand.

Amazon Parks $5 Billion Next to a Nuclear Plant — Because of Course They Did

While Oracle retreats from West Texas, Amazon is doubling down in Somervell County — right next to Vistra's Comanche Peak nuclear plant. The proposal: $5 billion, 435 acres, 18 two-story buildings. Amazon Data Services has filed tax abatement applications with county commissioners, which means this is well past the "exploratory conversation" phase.

The location is the story. Comanche Peak is one of two operating nuclear plants in Texas, generating roughly 2.4 GW of baseload power. Amazon isn't just building near a power source — they're building on top of one. This is the co-location model I've been tracking: skip the transmission queue, sit next to generation, negotiate a direct power purchase. It's the same logic that drove Microsoft's Three Mile Island deal, except Amazon is doing it in Texas where the regulatory environment is friendlier and the grid operator actually wants you to build.

Watch for the county commissioners' vote on the tax abatement. If it clears — and it almost certainly will — this becomes the largest single data center investment in Texas by dollar value.

The Great Bitcoin Liquidation: Miners Go All-In on AI

I flagged Starboard's push to convert Riot Platforms into an AI infrastructure play two issues ago. That was the activist investor telling miners to pivot. This week, we're watching the industry actually do it — and the numbers are staggering.

CleanSpark sold 553 of its 568 Bitcoin mined in February — that's 97% of production. The proceeds are funding a 300 MW AI data center campus in Texas. MARA Holdings launched a joint venture with Starwood Capital to convert existing mining sites into AI/HPC facilities. And Riot itself is shifting to a "Power-as-a-Service" model, leasing its Texas power capacity to hyperscalers instead of burning it on hash rates.

Across the public mining sector, over 15,000 BTC were sold in recent weeks to fund AI infrastructure buildout. The HODLing era for public miners is over. They looked at their power contracts, their land positions, and their cooling infrastructure, and they did the math. An AI GPU rack generates more revenue per megawatt than a Bitcoin mining rig. The economics aren't even close.

For Texas, this matters because these miners already hold gigawatts of contracted power capacity that doesn't need to go through the interconnection queue. They're the fastest path to new AI compute in the state — and everyone knows it.

Aligned's $700 Million Bet on DFW: Lambda Gets a Texas Home

While all eyes are on West Texas and nuclear co-location plays, Aligned Data Centers is quietly building the largest AI data center in the Dallas metro. The southeast Plano campus: $700 million, 425,000 square feet, 72 MW total capacity. The tenant is Lambda, which builds Nvidia-compatible AI training infrastructure.

The first 9 MW tranche is on track for June delivery, with additional 9 MW batches coming online quarterly. This is the "boring infrastructure" story that doesn't make Bloomberg headlines but represents the steady build-out that actually delivers compute capacity. DFW has the fiber connectivity, the workforce, and — critically — better transmission access than West Texas. While Abilene stumbles, Plano delivers. There's a lesson in that.

ERCOT Joins the Big Leagues

Here's one that flew under the radar. On March 12, ERCOT was formally admitted to GO15 — the peer network of the world's largest electricity transmission operators. Members include National Grid (UK), AEMO (Australia), and Tennet (Germany/Netherlands). For a grid that famously operates in isolation from the rest of North America, this is a meaningful signal.

ERCOT isn't joining GO15 because everything is running smoothly. It's joining because its challenges — 230+ GW in the interconnection queue, wait times exceeding five years, explosive demand growth from data centers — are the same challenges every major grid is facing. Pablo Vegas (ERCOT's CEO) and NESO's Fintan Slye are co-headlining the ERCOT Innovation Summit on March 31 in Round Rock. The subtext: Texas grid problems are now global infrastructure problems, and the solutions will need to be shared.

For context, when I started writing this newsletter, ERCOT was still the grid that froze in 2021. Now it's the grid everyone is watching to see if exponential AI demand growth can coexist with reliable power delivery. The world is literally taking notes.

What to Watch Next Week

• ERCOT Innovation Summit (March 31, Round Rock) — Pablo Vegas and NESO's Fintan Slye will discuss queue reform and transmission investment. Expect real announcements, not just panel discussions.
• Amazon Somervell County vote — County commissioners are expected to act on the tax abatement application for the $5B Comanche Peak-adjacent campus. If approved, construction timelines follow fast.
• Meta/Crusoe capacity deal — Nvidia is brokering Meta's takeover of 600 MW of stranded Stargate capacity. Watch for lease terms and pricing — this sets the market for secondary AI infrastructure deals.
• Google Energy Impact Fund — Details on which Texas energy and infrastructure projects will receive funding from Google's new $30 million initiative, announced alongside new data center projects in Armstrong and Haskell counties.
• PUC Project 58481 — Final large-load interconnection standards for 75+ MW connections (read: data centers) expected by mid-2026. The comment period should produce fireworks.

Disclaimer: This newsletter is for informational purposes only and does not constitute investment advice. Barrio Energy has financial interests in Texas energy infrastructure. Always conduct your own due diligence before making investment decisions.

Something broke loose in Texas energy this week. Not one story — five, all at once, all pointing the same direction. A 226 GW interconnection queue that's quadrupled in a year. A crypto miner sitting on 1.7 GW of power getting told by Wall Street to pivot to AI. The largest power project permit in U.S. history — 7.65 GW — cleared in Pecos County. Battery storage about to overtake California. And small modular nuclear reactors moving toward regulatory approval by year-end. If you're still wondering whether the Texas grid buildout is real, this is the week that answers the question.

Let's break it down.

"Well Positioned to Execute": Starboard Storms Riot, and AMD Writes the Check

Riot Platforms has been straddling two identities for over a year — Bitcoin miner and aspiring AI infrastructure landlord. This month, both halves got louder. In January, Riot signed a 10-year data center lease with AMD for 25 MW of critical IT load at its Corsicana facility, a deal expected to generate $311 million in revenue. The stock jumped 11% on the news. Then in February, activist investor Starboard Value — holding a 3.12% stake — released a letter that read less like a suggestion and more like a blueprint.

Starboard's thesis is straightforward: Riot's 1.7 gigawatts of Texas power capacity — mostly at Corsicana and Rockdale — is wildly undervalued as a mining operation. Repurpose it for AI/HPC hosting, and the company could generate over $1.6 billion in annual EBITDA, creating somewhere between $9 billion and $21 billion in equity value. The stock popped another 7% on the letter alone. The AMD deal validates the model. Starboard wants to see it scaled — fast. And they're not wrong. In a market where securing grid-connected power in ERCOT takes years, Riot is already sitting on the infrastructure. Smart money, quiet move. Well, not so quiet anymore.

GW Ranch: 7.65 Gigawatts and a Permit to Prove It

While everyone debates how to power AI data centers, Pacifico Energy went ahead and got the permit. GW Ranch in Pecos County — 8,000+ acres, 17 miles north of Fort Stockton — just received air permit approval from the Texas Commission on Environmental Quality for 7.65 GW of natural gas generation. That makes it the largest single power project permit in U.S. history.

The numbers are staggering. The facility is authorized to release over 12,000 tons per year of regulated air pollutants and up to 33 million tons per year of greenhouse gases — roughly 5% of Canada's total annual emissions from a single site. First power is expected in H1 2027, with a guaranteed pathway to scale to 5 GW. The anchor customers? Undisclosed, but the profile screams hyperscaler. When you're building 7.65 GW of on-site generation in West Texas, you're not powering strip malls.

This is what the data center power problem looks like when someone actually solves it: skip the interconnection queue, build your own power plant, and get TCEQ to sign off. Environmental groups will have things to say. But the permit is approved. The project is moving.

Texas Battery Storage Is About to Overtake California

Here's a stat that would have been unthinkable two years ago: Texas entered 2026 with 13.9 GW and 22.9 GWh of commercially operational grid-scale battery storage, and it's projected to overtake California in total BESS capacity by end of Q1. New projects account for roughly 53% — or 12.9 GW — of all U.S. battery storage capacity planned for 2026.

The pipeline is deep. Tehuacana Creek 1 — 837 MW solar paired with 418 MW of battery storage — is the largest solar project coming online this year. GridStor's 150 MW Gunnar Reliability project in Hidalgo County, backed by a Fortune 500 tolling agreement, is targeting operation by year-end. And one developer has secured 10+ GWh of BESS capacity specifically to supply data centers, with 2 GWh delivering this month.

The real validation came during winter storm events earlier this year, when battery projects delivered critical energy during peak constraint periods. ERCOT's grid reliability story is changing. With 12.9 GW of new storage coming online, Texas is decoupling from pure gas dependence and solving the intermittency problem that's haunted the grid since 2021. For data center developers, that means 4-6 hours of BESS backup without relying on the grid for critical loads. That's a different risk profile.

226 GW in the Queue, and the PUC Is on the Clock

ERCOT's large load interconnection queue hit 226 GW as of late 2025, nearly quadrupling from 63 GW at the end of 2024. About 77% of those requests — 174 GW — come from data centers targeting 2030 grid connections. To put that in perspective, ERCOT's current installed capacity is roughly 165 GW. The queue alone is 1.4 times the entire existing grid.

The Texas PUC is now required — under Senate Bill 6, signed in June 2025 — to complete formal rulemaking on large-load interconnection standards by December 2026. ERCOT has prioritized a 2026 project to gather information from the 200+ GW of queued loads and is developing "Batch Zero" criteria: a framework for fast-tracking the highest-priority projects through a revised planning process instead of the old one-by-one study model. SB 6 also imposed a $100,000 interconnection fee with disclosure requirements, designed to weed out speculative bids and separate real demand from phantom demand.

This is the bottleneck that determines everything else. The queue management question isn't academic — it decides which data centers get built by 2028 and which ones wait until the 2030s. If the PUC gets "Batch Zero" right, we could see 30-50 GW of data centers connected by 2028. If they don't, the developers with on-site generation (see: GW Ranch) win by default.

Texas Bets on Nuclear: X-Energy Eyes Q4 Regulatory Approval

The long game got shorter this month. X-Energy is on track for regulatory approval of its small modular reactors in Q4 2026, backed by $1.2 billion from the DOE's Advanced Reactor Demonstration Program. The plan: four 80-MW reactors at Dow Chemical's Seadrift facility on the Texas coast, with first power expected in the early 2030s. Meanwhile, the Texas Legislature passed House Bill 14 last year, creating a $350 million Texas Nuclear Development Fund — the largest state-level nuclear commitment in the country.

SMRs won't solve the 2026-2028 power crunch. Current cost estimates range from $2.9 million to $10.1 million per MW, which needs significant compression before the economics work at scale. But that's not the point right now. The point is regulatory momentum. If X-Energy clears NRC approval this year, it de-risks everything that follows — private investment, site selection, industrial partnerships. Dow's Seadrift deployment signals industrial demand for on-site nuclear, and the same model could eventually serve data center clusters in the same corridor. Texas is positioning for a generation mix that includes nuclear by the 2030s. The groundwork happens now.

What to Watch Next Week

PUC Large-Load Rulemaking Progress: The formal rule proposal on interconnection standards is expected early this year. Watch for published drafts, comment deadlines, and the definition of "Batch Zero" criteria — this determines which of the 226 GW queue projects get fast-tracked.

ERCOT Innovation Summit (March 31): CEO Pablo Vegas keynotes alongside NESO's Fintan Slye. Expect updates on real-time co-optimization deployment, interconnection queue management, and the grid modernization roadmap through 2028.

Riot Platforms Q1 Earnings Preview: The first full quarter of AMD deal revenue drops in late April. Markets will be watching AI/HPC revenue guidance and management's response to Starboard's $9-21 billion equity thesis.

GW Ranch Anchor Customer Announcement: Pacifico Energy is expected to confirm phased power delivery schedules and identify anchor data center tenants. The hyperscaler shortlist is the open question — Meta, Google, Amazon, and xAI are all active in West Texas.

Battery Storage Q1 Numbers: Texas is expected to formally pass California in total BESS capacity by end of March. Watch for updated deployment figures from ERCOT and project-level completion announcements.

This newsletter is for informational purposes only and does not constitute investment advice.

A year ago, ERCOT's large load interconnection queue stood at 63 gigawatts. Today it's 226 GW. That's not a typo and it's not a rounding error. It's the sound of every hyperscaler, crypto miner, and industrial manufacturer in the country deciding that Texas is where the power is — and then finding out that getting connected to that power is an entirely different problem.

This week gave us the clearest picture yet of how the Texas grid is evolving under pressure. Batteries are scaling faster than anyone predicted. Nuclear startups are moving from pitch decks to permits. And ERCOT, facing the largest interconnection bottleneck in American history, did what any self-respecting grid operator would do: it hired McKinsey.

The Queue That Ate Texas

ERCOT's large load study queue hit 226 GW this month, up from 63 GW at the end of 2024. To put that in perspective, ERCOT's current peak demand is about 85 GW. The queue now represents nearly three times the entire grid's capacity, and most of the growth is coming from data centers.

The backlog has gotten severe enough that ERCOT brought in McKinsey to help redesign its interconnection process. The consulting engagement, confirmed in recent board filings, signals that the grid operator recognizes its current study-by-study approach can't scale. Batch processing, financial collateral requirements, and priority tiers are all on the table.

The fundamental tension hasn't changed: Texas's deregulated market attracts more load than any other grid in North America, but the interconnection pipeline was designed for a world where new loads arrived in hundreds of megawatts, not tens of gigawatts.

The Hyperscaler Land Grab Continues

If the queue numbers suggest Texas is popular, this week's real estate activity confirmed it. OpenAI and SoftBank's Stargate project continued advancing on its 1.2 GW campus in Abilene, with site preparation work visible on satellite imagery. The project represents the single largest data center commitment in Texas history.

Meanwhile, Rowan Digital Infrastructure broke ground on a 300 MW campus in San Antonio, and Crow Holdings announced plans for a 245 MW facility in the Dallas-Fort Worth metroplex. On the smaller end, Soluna Computing disclosed a 100+ MW AI hosting expansion at its West Texas sites, specifically targeting the curtailed renewable energy that other operators avoid.

The pattern is clear: hyperscalers are acquiring land and power positions across every major Texas load zone, and they're doing it in parallel, not sequentially.

Batteries: 13.9 GW and Counting

Texas battery storage capacity hit 13.9 GW in February 2026, nearly double the 7.5 GW installed at this time last year. That makes ERCOT the largest battery storage market in the United States by a wide margin, and the growth shows no sign of slowing.

The buildout is being driven by two forces. First, wholesale price volatility in ERCOT creates a natural arbitrage opportunity — batteries charge when wind and solar push prices negative, then discharge during evening peaks when prices spike. Second, the grid reliability argument has become impossible to ignore. During Winter Storm Heather in January, batteries discharged over 10 GW within minutes, preventing what could have been another Uri-scale emergency.

The economics are also improving. Battery costs have dropped roughly 40% since 2023, and ERCOT's scarcity pricing mechanism means storage operators can earn their entire annual return in just a handful of high-price hours. That's a business model Wall Street understands.

The Nuclear Renaissance Gets a Permit

Small modular reactors have been "five years away" for so long that the phrase became an industry joke. But X-Energy announced this week that it's on track to receive Nuclear Regulatory Commission design approval for its Xe-100 reactor in Q4 2026, which would make it the first advanced reactor design approved for commercial deployment in the United States.

Separately, Aalo Atomics, a startup backed by Y Combinator, announced a partnership with a Texas landowner to site a microreactor near an existing industrial load. The company's approach — factory-built reactors under 50 MW — targets the behind-the-meter market that data centers increasingly want.

Neither of these projects will produce power before 2028 at the earliest. But for the first time, nuclear is moving through regulatory and commercial milestones, not just conference panels. That matters because it shifts the conversation from "if" to "when" — and "when" is the only question that matters for capital allocation.

M&A: Blackstone Goes Utility Shopping

Blackstone closed its $11.5 billion acquisition of TXNM Energy this week, giving the private equity giant ownership of PNM Resources' regulated utility operations serving New Mexico and parts of West Texas. The deal positions Blackstone at the intersection of grid infrastructure and data center demand.

In a separate but thematically related deal, Diversified Energy Company announced a $245 million acquisition of East Texas natural gas assets. The assets include producing wells and gathering infrastructure that feed directly into gas-fired generation facilities.

Both deals reflect the same thesis: energy infrastructure in and around Texas is undervalued relative to the coming wave of power demand, and the smart money is buying physical assets, not futures contracts.

What to Watch Next Week

ERCOT Board Meeting (March 3): The board is expected to discuss the McKinsey engagement and potentially vote on interim queue management measures.

Stargate Permitting: Abilene's city council meets Tuesday to review infrastructure commitments related to the OpenAI/SoftBank campus.

Battery Revenue Data: February settlement data from ERCOT will show how storage assets performed during the month's cold snap events.

X-Energy NRC Timeline: The company's updated regulatory schedule is expected to be filed with the NRC by end of week.

This newsletter is for informational purposes only and does not constitute investment advice.

Activist investors are now telling Bitcoin miners what to do with their Texas power capacity. Google just bought an entire energy company so it doesn't have to wait in line for grid access. And NRG is breaking ground on a new gas plant in Houston because somebody has to actually generate the electricity all these data centers are going to need.

Three very different plays this week. All pointed at the same reality: whoever controls power in Texas controls the AI buildout. And the race to lock it down is getting aggressive.

Starboard Tells Riot Platforms: "You're Sitting on $1.6 Billion. Act Like It."

Activist investor Starboard Value went public this week with a letter to Riot Platforms, and it wasn't subtle. Starboard wants Riot to stop treating its 1.7 gigawatts of Texas power capacity like a Bitcoin mining operation and start treating it like what it actually is: one of the most valuable AI infrastructure footprints in the state.

Starboard's pitch is blunt. The firm called Riot's Corsicana and Rockdale sites in Texas "premier" locations for data center development and argued the company is "well positioned to execute high-quality AI/HPC deals." The math they laid out: converting those sites to AI hosting could generate over $1.6 billion in annual EBITDA. AI tenants pay steady, high rents with 80% to 90% profit margins. Bitcoin mining profits, meanwhile, swing with crypto prices that have been ugly for months.

Riot's stock jumped nearly 9% on the news. And Riot isn't starting from zero. In January, the company signed a 25 MW lease deal with AMD at its Rockdale facility, converting part of the cryptomine to high-performance computing. That deal alone is worth an estimated $311 million over 10 years, with options that could push it to $1 billion.

J.P. Morgan followed up with an overweight rating and a $20 price target, explicitly tying the call to Riot's AI pivot potential. Two weeks ago, I told you the miner pivot story was just getting started. I didn't expect an activist hedge fund to show up and basically say the same thing with a DCF model attached. But here we are.

Google Bought Intersect Power for $4.75 Billion. Think About What That Means.

Google's parent Alphabet is doing something none of the other hyperscalers have tried at this scale: buying an entire energy development company. The $4.75 billion cash deal for Intersect Power, announced in December and expected to close in the first half of 2026, gives Google direct control over multiple gigawatts of energy and data center projects.

The logic is straightforward. Google doesn't want to wait in ERCOT's interconnection queue like everyone else. Intersect Power founder and CEO Sheldon Kimber has been building exactly the kind of co-located energy and data center infrastructure that Google needs, including the Quantum Clean Energy Project in Haskell County, Texas: 640 MW of solar, 1.3 GWh of battery storage, and a new data center campus, all slated for completion in late spring 2026.

The numbers behind Intersect tell you how serious Google is about supply. Intersect has a 2.4 GW solar module deal with First Solar through 2026 and a 15.3 GWh Tesla Megapack agreement through 2030. By 2028, the company expects 10.8 GW of capacity online or in development. Google projected its 2026 AI infrastructure capex at between $91 billion and $93 billion. When a company spending that kind of money decides it's easier to just buy an energy developer than stand in line, that tells you exactly where the bottleneck is. It's not chips. It's not talent. It's power.

NRG Breaks Ground on $617 Million Gas Plant in Houston

While the hyperscalers chase solar, batteries, and nuclear, NRG Energy is making a very different bet: a new natural gas plant at its Greens Bayou complex in northeast Harris County. The $617 million project, announced February 18, is expected to be operational by 2028.

Governor Greg Abbott was quick to claim credit, announcing that the project qualified for a state incentive program and calling it an investment that "will add more power to Texas' energy infrastructure and help meet energy needs of Texas homes and businesses." Classic.

The timing matters. ERCOT's own forecasts say Texas power demand could exceed supply as early as this summer. The EIA recently revised its ERCOT growth rate projection from 15.7% down to 9.6% for 2026, but even the lower number is enormous. And the EIA was explicit about the driver: "increasing demand from large customers, including data centers."

Gas plants aren't sexy. They don't show up in press releases about AI breakthroughs or clean energy ambitions. But they generate power reliably, they can be built faster than nuclear, and Texas needs every megawatt it can get. Sometimes the boring play is the smart one.

Blackstone Just Got the Keys to a Texas Utility

One more deal worth flagging. On February 6, the Public Utility Commission of Texas unanimously approved Blackstone Infrastructure's $11.5 billion acquisition of TXNM Energy. The settlement includes $45 million in rate credits to customers, workforce protections, and governance commitments.

Blackstone isn't buying a utility because it loves regulated returns. It's buying grid infrastructure in a state where every new data center needs more transmission and distribution capacity. The PUCT expects consumers to pay roughly $32 billion in new utility infrastructure costs between now and 2032. That is a lot of rate base growth for the company sitting on it. Smart money, quiet move.

Meanwhile, Batteries Keep Quietly Saving the Grid

During the most recent winter storm, battery storage provided 9.5% of ERCOT grid power, more than 7,000 megawatts. Enough to power roughly 1.75 million homes. Noah Roberts, executive director of the U.S. Energy Storage Coalition, called Texas the nation's "gold standard" in implementing battery storage.

Three years ago, batteries were a rounding error on the ERCOT grid. Now they're outperforming some gas plants during peak demand events. That's not hype. That's 7,000 megawatts of proof. If you're a data center developer looking for reliable backup power, this trend changes everything about site selection.

What to Watch Next Week

Riot Platforms earnings call: Watch for specifics on the Corsicana AI conversion timeline and whether Starboard's pressure accelerates management's pivot plans.

Google/Intersect closing timeline: The deal is expected to close in H1 2026. Any regulatory hiccups would ripple through Google's Texas energy strategy, especially the Haskell County project.

ERCOT batch study results: The first batch of interconnection applications under the new rules should start producing results. This will sort the real projects from the paper ones.

Stargate Abilene construction milestones: Published reports suggest the campus is approaching 1 GW of capacity by mid-2026. Updated construction numbers should surface this month.

This newsletter is for informational purposes only and does not constitute investment advice.

Last week, we told you ERCOT was stuck in a "study doom loop." This week, they're breaking out of it — and the implications for Texas data center development are massive.

On February 14, ERCOT's Public Utility Commission (PUC) approved a slate of reforms designed to unclog the interconnection queue that's been holding up over 250 GW of proposed new generation and load. The changes include mandatory financial collateral for interconnection applications, a new batch study process, and stricter timelines for project developers. It's the most significant overhaul of ERCOT's queue process in the grid's history.

But even as ERCOT rewrites the rules, the hyperscalers aren't waiting. Another week, another round of massive announcements. The pace of data center development in Texas shows no signs of slowing.

ERCOT's Big Fix: What Changed

The PUC's order, approved unanimously, addresses three critical bottlenecks:

1. Financial Collateral Requirements: Starting immediately, interconnection applicants must post collateral of $5,000/MW for projects in the study phase. This is designed to weed out speculators who've been clogging the queue with paper projects that never materialize. Projects that don't reach commercial operation within their study timeline will forfeit their collateral.
2. Batch Processing: ERCOT will now process interconnection requests in batches rather than individually. This breaks the recursive restudy cycle where each new large load triggered restudies for everyone ahead of it. The first batch is expected to clear 15-20 GW of backlogged projects.
3. Transmission Planning Integration: New large loads must now align with ERCOT's transmission planning process, creating a more predictable pathway for data center developers.

Jeff Billo, ERCOT's VP of grid planning, called it "the most significant reform since ERCOT's formation." He's not wrong. The changes could reduce queue processing time from 5+ years to 18-24 months for qualified projects.

The Hyperscalers Keep Spending

While ERCOT was fixing its processes, the hyperscalers were busy announcing more deals:

Microsoft revealed plans for a 500 MW data center campus in Montgomery County, just north of Houston. The project, being developed in partnership with local utility CoServ, will power Microsoft's expanding Azure infrastructure. Construction begins Q3 2026.

Amazon announced it has withdrawn from its $150 million advance agreement with Fermi Energy (mentioned last week as a warning sign). But Amazon isn't retreating from Texas — far from it. Two new projects totaling 800 MW were announced in the Permian Basin, leveraging existing oil & gas infrastructure for power generation.

Oracle's Stargate project near Abilene secured $12 billion in additional financing, bringing the total to $50 billion. The first 400 MW phase is on track for Q4 2026 operation.

Meta entered the Texas market with a 300 MW commitment in Taylor, just outside Austin. The social media giant is pivoting hard toward AI infrastructure.

JLL's Curt Holcomb summed it up: "The demand signal is unlike anything we've seen in 30 years of tracking data center development. Texas has moved from 'interesting' to 'essential' in the span of six months."

What This Means for Landholders

Here's the key insight that's getting lost in the headlines: the real value isn't in the data centers themselves — it's in the grid connections.

With ERCOT's queue now requiring collateral and stricter timelines, projects that already have interconnection agreements are worth significantly more than they were six months ago. Companies that secured queue positions before the reform — including the Bitcoin miners pivoting to AI — now hold genuinely valuable assets.

Several mid-cap Bitcoin miners with ERCOT interconnection rights have seen their stocks rally 30-50% this week on the reform news. Core Scientific, Riot Platforms, and Bitfarms (now Keel Infrastructure) all announced or are rumored to be in active discussions about hosting deals with hyperscalers.

What to Watch Next Week

March 1 is the deadline for the first batch of ERCOT interconnection applications under the new rules. Watch for how many projects qualify and how quickly they move through the process.

Army data center proposals at Fort Hood and Fort Bliss were due February 23 — the winning bidders should be announced this week. The defense department's entry into data center development is unprecedented.

Natural gas prices continue to rise as new power plants come online. Henry Hub spot prices hit $4.50/MMBtu this week, up 40% from January. This is good news for Texas gas producers but adds cost pressure to new data center developments.

Barrio Energy provides independent analysis of Texas power markets, data center development, and digital infrastructure. This is not investment advice.

On Thursday morning, Ben Gagnon stood up in front of investors and said the quiet part out loud: "We are no longer a Bitcoin company." His company, formerly Bitfarms, is now Keel Infrastructure — redomiciled from Canada to Delaware, pivoted from mining rigs to server racks, and betting the whole house on AI.

Three days later, Google signed the largest renewable PPA in TotalEnergies' American history — a full gigawatt of solar capacity destined for Texas data centers. And somewhere in Austin, ERCOT's grid planners admitted they're stuck in what one VP called a "study doom loop," unable to process interconnection requests faster than they arrive.

Welcome to the week that made clear: Texas isn't just part of the AI infrastructure story anymore. Texas is the story.

The Miners Are Leaving. The Question Is Whether They Can Pivot Fast Enough.

Let's be honest about what happened to Bitcoin mining this week: it got ugly. Mining difficulty dropped roughly 11% — the biggest single decline since the Chinese government effectively banned the industry in 2021. Hashprice cratered to $35/TH/s.

On February 5, public miner stocks got hammered in unison: CleanSpark down 10%, Marathon Digital down 11%, TeraWulf down 8.5%, Riot Platforms off 4.8%. It was the kind of day that makes CFOs update their résumés.

Then Winter Storm Fern rolled through Texas and demonstrated, once again, the peculiar position Bitcoin miners occupy on the ERCOT grid. MARA curtailed about 550 MW of load in ERCOT — 770 MW globally — as spot prices spiked to $1,200/MWh. Across the system, an estimated 12 GW of mining load was shed.

MARA framed it as civic virtue: "Bitcoin mining is interruptible, we can power down our facilities in minutes, freeing up substantial capacity on the grid." That's true. It's also true that getting paid nothing while the grid charges everyone else $1,200 per megawatt-hour is not exactly a business model you pitch to growth investors.

Which is why the Bitfarms-to-Keel rebrand matters beyond the name change. Gagnon isn't just chasing a trend — he's following a survival instinct shared by every public miner watching their margins compress in real time. Core Scientific got there first with its CoreWeave deal. IREN, CleanSpark, and TeraWulf are all at various stages of the same pivot.

The pitch is simple: these companies hold land, power interconnections, and transmission access in a market where hyperscalers are desperate for all three. The hard part is converting a mining site into something a Google or a Microsoft would actually lease. That takes capital, engineering, and time — three things miners are short on.

The Hyperscalers Are Writing Checks That Would Make Defense Contractors Blush

The sheer volume of capital committed to Texas data centers this week borders on parody. Except these aren't concept decks — they're signed contracts.

Google's $40 billion Texas commitment by 2027 got a tangible milestone on February 9, when TotalEnergies announced the 1 GW solar PPA. TotalEnergies SVP Marc-Antoine Pignon called it the largest renewable PPA volume the company has ever signed in the United States. Google is also in negotiations with Bolt Data — the data center company backed by former Alphabet CEO Eric Schmidt — for a 250 MW deal at a West Texas campus that could eventually scale to 5 GW. That's not a typo. Five gigawatts. For one campus.

Oracle's Stargate project near Abilene is targeting 1.2 GW with $38 billion in financing, though word on the street is JPMorgan is having trouble syndicating the debt. That's worth watching — a $38 billion deal that can't find enough lenders tells you something about risk appetite at the margins.

Constellation Energy and CyrusOne locked in 1,100+ MW across two Texas sites — Freestone County and Thad Hill. Constellation CEO Joe Dominguez offered the obligatory patriotic framing: "Constellation is helping lay the foundation that will keep America at the forefront of AI and digital technology." Fine. More relevantly, Constellation is positioning itself as the go-to power provider for data centers at a scale that makes its nuclear fleet look purpose-built for this moment.

And the pipeline keeps growing. Amp Z wants to build a $1B+ campus on 1,000 acres near Lufkin. Black Mountain's $10 billion Fort Worth megaproject is stuck in city council approvals. Rick Perry's Fermi Energy has an 11 GW fantasy planned for Amarillo, except Amazon just pulled a $150 million advance — not a great sign. And in a move that captures the surreal tenor of the moment, the U.S. Army is leasing Fort Hood and Fort Bliss to data center developers on 50-year terms. Proposals are due February 23.

Morgan Stanley put a number on the overall picture: the Big 4 hyperscalers are projected to spend roughly $700 billion in 2026 capex, and the bank expects "upward pressure on hyperscaler capex estimates" to continue.

Curt Holcomb at JLL laid it out: "Texas, and ERCOT in particular, is experiencing more demand and requests for power capacity than any other region in the country." No kidding.

ERCOT's Doom Loop: Too Much Demand, Not Enough Process

Here's where the optimism runs headlong into physics. ERCOT's demand forecast now projects 145 GW by 2031. The grid currently has about 85 GW of installed capacity. That's a 70% gap, and the timeline is five years.

Jeff Billo, ERCOT's VP of grid planning, told Houston Public Media this week that the interconnection queue has devolved into a recursive nightmare: "We are continually having to restudy those large loads." Every time a multi-hundred-megawatt data center enters the queue, it triggers restudies of the projects already in line.

ERCOT is now switching to a batch study process to try to break the cycle and may revisit 8.2 GW of previously approved load. Billo acknowledged what everyone in the Texas energy world already knows: "All that AI magic happens at a data center... a lot of those data centers are being built in Texas."

SB6 is trying to add financial collateral requirements — essentially making developers put real money behind their interconnection applications to weed out the speculators from the builders.

Nationally, 252 GW of gas-fired generation is in planning stages, a lot of it aimed at Texas. But "planned" and "operating" are very different words in power development.

The irony isn't lost on anyone: the Bitcoin miners who already have grid connections — the ones pivoting to AI — may end up holding the most valuable asset in the state. Not because of what they built, but because of the queue position they're sitting on. In a market where getting plugged in might take years, being plugged in already is worth more than the facility itself.

What to Watch Next Week

February 23 brings the deadline for Army data center proposals at Fort Hood and Fort Bliss — the bidder list will reveal how seriously the defense establishment is taking this play.

Keep an eye on JPMorgan's progress syndicating Oracle/Stargate's $38 billion. If that deal doesn't come together, it reshuffles the deck in West Texas.

ERCOT's batch study details will start defining winners and losers in the interconnection queue.

And if hashprice stays pinned below $35/TH/s, expect at least one more public miner to drop the word "Bitcoin" from its investor deck before the month is out.

Barrio Energy provides independent analysis of Texas power markets, data center development, and digital infrastructure. This is not investment advice.