Texas lawmakers hear testimony on state’s growing data center industry, as Texas set to become data center hub

Texas lawmakers convened at the Capitol in Austin for a hearing by the Texas House State Affairs Committee to address the rapid expansion of the state's data center industry. The state is poised to become the nation's largest data center hub, with a Bloom Energy report indicating it will meet nearly 30% of the country's demand by 2028. Key discussions revolved around the state's electricity grid capacity and water usage. Pablo Vegas, CEO of ERCOT, presented findings from a batch study assessing transmission capacity for over 400 data centers slated for connection within the next five years. Energy companies NRG, Oncor, and Vistra also testified, with Vistra Executive Vice President for Public Affairs, Stacey Dore, noting that increased demand from data centers could optimize grid utilization and distribute fixed costs more broadly. Water conservation was also a significant point, as data centers require water for cooling systems. Haynes Strader, Chief Development Officer for Skybox Data Centers, highlighted their closed-loop cooling systems, which boast a 2% water loss rate. He asserted that such data centers would use substantially less water than other commercial developments of similar size. The committee also reviewed a 2015 law granting sales tax exemptions for qualifying data centers, a benefit already utilized by over 100 facilities. With data centers under construction in Temple and Clifton and potential projects in Hubbard and Lacey-Lakeview, Chairman Ken King announced that further meetings would be scheduled to continue evaluating the future development of data centers across Texas.