Texas is being chosen, on a massive scale, as the place to build the artificial intelligence economy. That’s already starting to show up in our bills.
If you drive through certain parts of North Texas, West Texas, or the corridor outside Austin, you’ll start noticing them — enormous warehouse-style buildings going up in the middle of pastureland, surrounded by chain-link fence and substations the size of football fields. These are data centers. Some of them belong to familiar names like Google, Microsoft, and Meta. Others belong to companies most people have never heard of. All of them have one thing in common: they consume staggering amounts of electricity.
In April 2026, ERCOT filed its long-term forecast and projected that peak electricity demand in Texas could reach 367,790 megawatts by 2032 — more than four times today’s all-time record of 85,508 megawatts. ERCOT itself was quick to caution that the number is probably overstated. Even so, the more conservative working estimates would still represent the largest growth in demand the Texas grid has ever seen.
Most of that growth comes from data centers, with cryptocurrency mining and large industrial operations making up the rest. According to ERCOT’s filings, more than 228,000 megawatts of the new requested load is data centers alone. Whether half of that gets built or only a quarter, it’s a tidal wave compared to what the grid was designed to handle.
Why Texas?
Data center developers are picking Texas for a fairly specific set of reasons. Land is available and relatively inexpensive. There’s no state income tax. The deregulated electricity market lets large customers negotiate directly with suppliers, which is faster than dealing with a regulated utility. And Texas has both the natural gas and the rapidly growing renewable resources to actually power what gets built.
Add to all of that the massive build-out of artificial intelligence, which depends on enormous computing facilities running flat-out around the clock, and Texas has become the leading destination in America for this kind of construction. Oncor alone reported anticipating more than 109,000 megawatts of large-load projects in its service territory by 2032. AEP reported more than 42,000 megawatts.
The era of data centers showing up unannounced is ending. Texas now requires them to report what they’re building before they ever flip the switch — and lawmakers have given ERCOT new authority to plan around them.
What This Means for Everyone Else
It’s reasonable to ask: if data centers are using all this new power, are the rest of us going to end up paying for it? The honest answer is complicated, but here are the broad strokes.
Forward electricity prices have moved up. The market is anticipating tighter conditions in the coming years, and that’s already reflected in the rates being offered today for plans starting next year and the year after. A homeowner shopping for a new plan in 2026 is looking at noticeably higher rates than someone who locked in two years ago. Wholesale price increases eventually flow through to retail rates.
The transmission build-out is going to be expensive. To move power from where it gets generated — often in West Texas — to where the new data centers are being built, the state will need billions of dollars of new high-voltage transmission lines. Who pays for those lines, and how, is one of the central debates happening at the Public Utility Commission right now. Some of those costs will eventually show up on every Texan’s delivery charge.
Reliability has gotten more attention. When the grid was being planned for modest year-over-year growth, the reliability conversation was different. Now, with massive new load potentially coming online over the next several years, ERCOT and the legislature have moved to put new rules in place. Senate Bill 6 — passed in 2025 and which we’ll cover in detail later in this series — requires large customers to share information about their projects up front and allows certain large loads to be curtailed during emergencies.
What Can You Actually Do About It?
Three practical things.
- Lock in rates while you can. If you’re approaching a contract renewal, there’s a reasonable case for choosing a longer fixed term right now. Forward prices are moving the wrong direction, and waiting tends to cost more than acting.
- Pay attention to your usage patterns. As prices climb, the gap between an average user and an efficient one widens. Small upgrades — better thermostats, weather stripping, LED lighting — pay back faster than they used to.
- Stay informed about the regulatory conversation. A lot of decisions about how transmission costs get allocated are being made right now at the PUC. The outcomes will affect every bill in Texas for the next decade.
The data center wave isn’t a future event we can prepare for at our leisure. It’s happening now, and the ripple effects are already showing up in the prices we pay. The good news is that an attentive household or small business can still come out fine — but it’s going to take more attention than it used to.
— Lee Miller
Lee Miller publishes Texas Forest Country Living and is co-founder of Amerigy Energy, a Texas-based electricity brokerage.
