Texas power companies and utilities see stellar 2Q on data center expansion
Texas utilities experienced strong revenue growth in the second quarter, primarily due to the rapid expansion of data centers driven by the artificial intelligence boom. Despite political pushback from state officials like Governor Greg Abbott, utilities maintain positive earnings outlooks. Texas is projected to surpass Virginia as the global leader in data center power markets by 2030.
The second quarter proved exceptional for Texas's publicly traded utilities, with robust earnings growth largely propelled by the booming data center industry and the surge in artificial intelligence. Industry analysts, like Alex Kania of U.S. Bancorp/BTIG, noted executives' confidence in executing on large-load demand backlogs, despite political scrutiny from Governor Greg Abbott and the Texas State House regarding data center development.
This unprecedented double-digit revenue growth in the typically stable utility sector is now becoming standard. For instance, Houston-based utility CenterPoint reported an 11% increase in revenue, reaching $2.15 billion in the second quarter. While Texas legislators are reportedly "tapping the brakes" on expansion, the state is still on track to become the global leader in data center power markets by 2030, potentially surpassing Virginia.