Issue #12 | September 24, 2026

On Monday, Governor Greg Abbott did something unusual. He ordered Texas to stop issuing permits sought by data centers until the state completes an audit of what these enormous projects will do to the electric grid and water supply.

Think about that. Texas is telling one of the fastest-growing industries in the world: Before you build here, we need to know where the electricity is coming from.

There's a reason.

ERCOT is considering more than 474 gigawatts of requests to connect to the Texas grid. Roughly 90% of those requests are data centers. That's more than five times Texas' record peak electricity demand.

Not all 474 gigawatts will ever be built. They don't have to be for the number to tell us something important about what's coming.

Something enormous is knocking on the door of the Texas electrical grid.

And every one of us is already on the other side.

Every person in Texas relies on electricity every minute of every day. Next to air, water and food, I can't think of anything more important—especially air conditioning on a hot Texas afternoon.

But electricity has a problem. Demand doesn't come in a straight line. It rises and falls by the hour, the weather and the season. At any given moment, somebody has to make sure there's enough electricity being produced to satisfy the electricity being consumed.

That's ERCOT's job. The Electric Reliability Council of Texas manages electricity for more than 27 million customers—about 90% of the state's electric load. ERCOT doesn't own the power plants or set your electric rate. Its job is to coordinate the flow of electricity and keep supply and demand balanced across the grid.

Texas already produces electricity from an incredibly diverse collection of sources. Over the most recent 12 months available, roughly 48% came from natural gas, 22% from wind, 11% from solar, 11% from coal and 7% from nuclear.

Battery technology has also improved dramatically over the last decade. Texas utilities and grid operators are now using massive lithium-ion battery energy storage systems, often housed in rows of container-sized units, to store electricity and return it to the grid when it's needed. Texas now has roughly 15,700 megawatts of operating battery-storage capacity, and similar technology is increasingly appearing in homes.

That's important because the real challenge isn't simply producing enough electricity. It's having enough at the moment everybody wants it.

And we already know what happens when we don't.

When I started researching this story, I thought about February 2021. Winter Storm Uri knocked out power to more than 4.5 million Texas homes and businesses.

But here's the part I didn't remember.

ERCOT said the Texas grid came within 4 minutes and 37 seconds of conditions that could have triggered a cascading failure.

Not simply another neighborhood losing power. As the electricity supply disappeared, the grid's 60Hz frequency was falling. Had it fallen far enough for long enough, additional generators could have automatically disconnected to protect themselves, potentially overloading what remained and causing still more generation to disconnect.

One failure could have triggered another, then another. ERCOT ordered massive controlled blackouts to stop that chain reaction. Operators later concluded they had only minutes to act before as much as another 17,000 megawatts of generation risked automatically dropping offline.

Ironically, turning off millions of lights helped prevent something much worse.

A cascading collapse could have made restoring the electrical system substantially more difficult. Instead of reconnecting customers as generation returned, operators would have faced the much more complicated task of restarting portions of the grid and carefully rebuilding the system.

Suddenly, "What happens if the lights don't come on?" isn't a hypothetical question.

The problem facing Texas today isn't another Winter Storm Uri. It's growth—more people, more businesses, more factories and now something capable of consuming electricity on an entirely different scale.

AI.

Your house has rhythms. People leave for work. Appliances turn on and off. Eventually everybody goes to bed. A data center can have thousands of computers operating around the clock, consuming enormous amounts of electricity while producing the computing power behind artificial intelligence and the digital economy.

A data center doesn't sleep.

That's why 474 gigawatts of connection requests gets your attention. This isn't simply more growth. It's a new kind of electrical demand arriving very quickly, and it raises a question Texas will spend years answering:

Where does the next megawatt come from?

Another natural-gas plant? Another solar farm? Another nuclear reactor? Another wind turbine? Probably all of the above.

But there's another answer.

Maybe everywhere.

Times of great change rarely produce only winners or only losers. They produce problems—and fortunes for the people who solve them.

Texas needs more electricity. AI needs enormous amounts of it. At the same time, homeowners and businesses increasingly want protection from the moment the grid can't provide it.

That collision is creating an entirely new energy opportunity.

The standby generator is the idea most of us already understand: the grid goes down and the generator comes on. But now homes can combine generators, solar, batteries and smart electrical systems to produce, store and control more of their own electricity.

And electric vehicles add another possibility. The giant battery sitting in your driveway can potentially send electricity back into your house.

For years, we plugged the car into the house.

Now we can plug the house into the car.

Scale that idea up. Businesses, industrial facilities and neighborhoods can combine generation, storage and intelligent controls into microgrids. Connect thousands of independent energy resources through software and they can potentially work together as a virtual power plant.

The electricity consumer begins to become part of the grid.

And that's where the adversity begins turning into opportunity. Somebody has to build the batteries, generators, fuel cells, smart panels, microgrids and software. Somebody has to install them, finance them and maintain them.

The AI boom is creating extraordinary demand for electricity.

Solving that problem may create an extraordinary industry of its own.

For more than a century, the deal was simple: the power company generated electricity and you bought it.

Technology is changing that relationship. Homeowners and businesses are gaining the ability to produce, store and manage more of their own electricity, while utilities are gaining new ways to coordinate millions of smaller energy resources with the larger grid.

For 100 years, the electrical grid ended at your meter.

The next generation of the grid may begin there.

The Texas Data Center Boom

Selected large data-center campuses proposed or under construction across Texas. Planned capacity does not equal actual grid demand, and project status and capacity can change.