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.