On May 11, 2026, the Cooke County Commissioners Court passed a resolution asking the state of Texas to give counties more say over how data centers get built and run. The resolution doesn’t oppose the industry outright. It says plainly that these facilities will matter to the state’s economy, then says just as plainly that they use enormous amounts of water and electricity, and that rural communities like this one are left with little control over either. Cooke County isn’t an outlier here. It’s one of a growing list of rural Texas counties reaching the same conclusion at close to the same time.
The scale of what’s actually happening
More than 480 large-scale data centers, each requiring at least 75 megawatts, have applied to connect to the Texas power grid through 2032. Combined, those requests add up to more than 418 gigawatts, over four times the all-time peak electricity demand the entire state of Texas has ever recorded. As of early 2026, ERCOT had more than 100 gigawatts of data center demand sitting in its interconnection queue alone, a number that could double the grid’s total demand by 2030 under some forecasts.
Dallas-Fort Worth has become one of the largest data center markets in the world in the span of about two years. A dozen major campuses are under construction or recently finished in the region, representing more than $50 billion in investment. Industry people have started calling it Silicon Prairie. Abilene is home to the Stargate complex, a joint OpenAI and Oracle project expected to draw 1.2 gigawatts once complete, enough power to run more than a million Texas homes from a single site.
What it costs in water
Every data center needs to stay cool, and most cooling still runs through water. Texas data centers used more than 50 billion gallons of water in 2024 alone, enough to supply a city the size of Austin for months. A UT Austin report released in May 2026 estimates data centers could account for 3 to 9 percent of the state’s total water use by 2040, up from less than 1 percent today.
The indirect water cost matters just as much as the direct one. Cooling a data center takes water on-site, but generating the electricity that powers it takes water too, especially from the natural gas and coal plants that make up the bulk of Texas power generation. About 0.9 liters of water get used to produce a single kilowatt-hour on the ERCOT grid. Without water-based cooling, a data center would need roughly 14 percent more energy to do the same job, which means even more water consumed upstream at the power plant. Some developers, including Google and Vantage Data Centers, have told state lawmakers they’re shifting toward air cooling and closed-loop systems that reuse water instead of evaporating it. That claim deserves a closer look before taking it at face value. A true closed-loop system, where water stays sealed in piping and is never lost to evaporation, can cut freshwater use by up to 70 percent compared to older evaporative cooling towers, and Microsoft has reported its newer chip-level closed-loop design eliminating water evaporation entirely at some sites. But not every facility marketed as “closed loop” works that way end to end. Many data centers run a closed loop only at the chip or server level, then still reject that heat into the outside air through a second, separate evaporative cooling tower, the same water-hungry equipment closed-loop marketing implies has been eliminated. An xAI data center in Memphis marketed around efficient cooling was still estimated to be using around 12 million gallons of water a day. The lesson isn’t that closed-loop technology is fake. It’s that “closed loop” as a marketing term doesn’t guarantee the whole facility avoids evaporative water loss, and it’s worth asking any developer making the claim which loop, exactly, is closed.
Whether any of this holds up at the scale Texas is building right now is still an open question, since the current state water plan doesn’t even fully account for the demand that’s already been announced.
The next problem: data centers building their own power plants
ERCOT’s interconnection queue can’t keep pace with how fast developers want to bring these facilities online, and that’s pushing a growing number of them toward a different strategy entirely: building their own power plants on-site, known as behind-the-meter generation. Power goes straight from a turbine to the data center without ever touching the public grid, which means the facility can start running years before a standard grid interconnection would come through, and it sidesteps state utility regulators entirely since the operator is buying gas directly from a supplier instead of electricity from a utility.
Texas leads the country in this kind of project, driven by cheap Permian Basin gas, existing pipeline infrastructure, and permissive state regulation. Chevron signed a 20-year deal through a subsidiary to supply 2.67 gigawatts of behind-the-meter gas power to a Microsoft data center project in Pecos, in West Texas ranching country. Meta, Amazon, Oracle, and multiple AI labs have pursued similar projects elsewhere in the state. Because the most efficient combined-cycle gas turbines are backordered for five to seven years industry-wide, many of these projects are turning instead to older or less efficient turbine equipment, and in at least one case reported by industry researchers, a supplier of cruise ship engines.
The footprint that comes with this is different from a facility that just draws power off the existing grid. Onsite gas turbines and diesel backup generators produce nitrogen oxide and volatile organic compound emissions that contribute to ground-level ozone, a documented respiratory hazard, according to the EPA. They also produce serious noise. Industrial diesel generators can run as loud as a jet engine overhead, and residents near an xAI facility in Southaven, Mississippi, running 27 onsite gas turbines have gone on record describing the constant roar disrupting sleep in their own homes. Any onsite combustion generation in Texas has to go through an air permit from the Texas Commission on Environmental Quality, but that permitting process runs on the state’s timeline, not the community’s, and reporting on Texas data center clusters has documented limited notification to nearby residents before permits get approved.
The turbine bottleneck, and why nuclear keeps coming up as the fix
The behind-the-meter gas rush runs into a hard supply problem. GE Vernova is the largest maker of the heavy-duty turbines these projects need, and as of July 2026 the company’s turbine supply is effectively sold out through 2030. Anyone placing an order today gets delivery no earlier than 2031. The backlog stood at 100 gigawatts in mid-2026, on track to reach 110 gigawatts by year-end, and pricing on new orders has climbed 10 to 20 percent since late 2025 simply because demand so badly outstrips what the company can build. Ordering a gas turbine right now doesn’t solve a power shortage. It reserves a spot in a queue that stretches half a decade out.
That bottleneck is part of why nuclear power keeps coming up as the longer-term answer, in Texas and nationally. Nuclear plants provide steady, round-the-clock baseload power without the emissions or noise profile of an onsite gas turbine farm, and without competing for the same backordered equipment every other data center developer in the country is chasing. The U.S. Department of Energy is actively working to remove barriers to building data centers directly alongside nuclear plants, including on federal land, and a recent executive order targets growing total U.S. nuclear capacity from about 100 gigawatts today to 400 gigawatts by 2050. Tech companies have already pushed to restart shuttered nuclear plants, including Three Mile Island, specifically to power their own data centers rather than wait on the grid.
China’s approach is often cited as a preview of where this goes, though the comparison needs a caveat. Data centers in eastern China, where most of the country’s facilities are concentrated, still draw roughly 70 percent of their power from coal today, with renewables around 20 percent and nuclear close to 10 percent. China is nonetheless building nuclear capacity faster than any other country, with about 62 gigawatts operating, 43 more under construction, and a new five-year plan targeting 110 gigawatts by 2030, which would make it the largest nuclear power market in the world. Energy researchers caution against reading that buildout as a response to AI demand specifically. China’s nuclear investment has been running for years independent of data centers, and its reactors sell power into the shared grid rather than getting built to serve one company’s facility the way U.S. developers are now doing with dedicated gas turbines. The honest version of the comparison is that China is scaling nuclear for reasons bigger than AI, while the U.S. is increasingly trying to point nuclear directly at AI, and neither approach has caught up to the pace data center demand is growing.
What it costs in tax revenue
Texas offers data centers a state sales tax exemption on equipment and electricity for facilities that invest at least $200 million and create at least 20 jobs, running for 10 to 15 years per project. That exemption cost the state around $150 million a year as recently as 2023 and 2024. In 2026, it’s projected to cost $1.3 billion, and the state comptroller’s office now estimates $3.2 billion in lost sales tax revenue over the next two years. State Senator Joan Huffman called the new numbers “extremely concerning” and said the growth is unsustainable.
On top of the sales tax break, local governments can offer their own property tax abatements under Chapter 312 of the Texas Tax Code, negotiated county by county or city by city. A separate program called JETI lets school districts offer their own property tax cuts to qualifying projects, replacing the older Chapter 313 program that state lawmakers shut down after years of criticism over how much revenue it drained from public schools. In Hood County, one data center project moved through a local commissioners’ vote to waive property taxes before commissioners had been given more than a vague description of the company involved, according to reporting from the Texas Tribune. That pattern, limited information reaching the public body that approves the deal, shows up again and again in these projects statewide.
What it costs in grid reliability
Texas already knows what happens when its grid fails under strain. The 2021 winter storm cut power to millions of Texans for days and killed hundreds of people. ERCOT has warned that data centers and cryptocurrency mining operations create a new version of that risk, since they can shut down suddenly and destabilize the grid in ways ordinary residential and commercial demand doesn’t. The Texas Legislature passed Senate Bill 6 in 2025 to address this, requiring any large electricity user above 75 megawatts to install remote disconnect equipment and participate in demand management programs the grid operator can trigger during a crunch.
The unresolved question is who pays for the grid upgrades this growth requires. In Texas’s deregulated electricity market, rapid industrial demand without matching investment in new generation and transmission tends to show up later as higher prices for everyone else on the grid, or as reduced reliability during the exact kind of extreme weather event that hits Texas hardest.
Where this leaves rural Texas counties
Cooke County’s resolution puts it plainly: the state currently gives counties very little formal authority over whether a data center gets built nearby, what it draws from local water systems, or what kind of tax deal gets offered to bring it in. Advocacy groups tracking this statewide point to two real opportunities for public input that most residents don’t know exist. A school board considering a JETI tax break has to hold a process residents can weigh in on before it’s approved. A city or county considering a Chapter 312 property tax abatement does too. Both usually show up first as a line item on a public meeting agenda, not as a headline.
What to watch for in your own county
Check your county and school district meeting agendas for anything referencing a “reinvestment zone,” Chapter 312, or JETI, since these are the terms the paperwork uses even when the announcement to the public calls it economic development. Ask what water source a proposed facility plans to draw from and whether that source already serves your community’s homes and agriculture. Watch for how much information commissioners are actually given before a vote, since Hood County’s experience shows that vague pitches asking for a tax waiver in exchange for promised jobs are common, not an exception. And if your county hasn’t taken a public position yet the way Cooke County has, that silence is itself worth asking your commissioners about directly.