Data centers are surging in number around Texas—oftentimes to opposition from local residents. State officials must confront the high costs of serving data center companies while protecting local communities and resources.
Uncertain water consumption by data centers in Texas continues to exacerbate the infrastructure, drought, and aquifer concerns. Due to the common drought conditions in the state, data collection that reflects historical water usage is important to ensuring water and resources are responsibly allocated.
High electricity demands from the data centers are contributing to rising costs and state regulators warn of “lower system stability.”
Some local government officials—including the Taylor City Council and the Bosque County Commissioners—have given tax incentives to entice data center companies to come to the area, despite concerns from residents.
These deals are offered in hopes of bringing economic prosperity through job creation and property tax revenue after the tax incentive period is over.
However, the data center company Crusoe, which is building facilities in Texas, mentioned “specialized roles do require bringing in specific expertise from across the nation” in a recent press release, indicating that not all jobs will be filled with local residents.
Williamson County
The Taylor City Council approved a Blueprint Data Center on land the city owns near a residential area. When the land was transferred to a nonprofit in 1999, a deed restriction required it “to be held in trust for future use as parkland by Williamson County.”
Taylor City Council and the Economic Development Corporation approved a 50 percent rebate on property taxes for 10 years on each of the three phases of construction for the $1 billion project during the June 26 council meeting. Additionally, the company will get a 50 percent rebate on local sales-and-use tax collected on construction material purchases.
Residents of Taylor filed a lawsuit against Blueprint’s parent company on July 31. However, Judge Ryan Lawson of the 395th district court dismissed all of the residents’ claims and denied the residents’ request for an injunction on October 8.
Terry Cook, a Williamson County Commissioner, told Texas Scorecard “the case was dismissed claiming residents didn’t have jurisdiction—I don’t agree but I’m not a lawyer.”
“The county is not involved in the approval process for data centers,” said Connie Odom, director of communications & media relations for Williamson County commissioners.
Hays County
CyrusOne, a data center company backed by Blackrock’s Global Infrastructure Partners and global investment firm Kohlberg Kravis Roberts (KKR), held a community meeting in August regarding approval for rezoning a property to allow construction of the data center.
The San Marcos Daily Record reported the CyrusOne representative’s statements did not match the presentation’s figures on how much water the company will use.
The San Marcos City Council denied the rezoning due to the public outcry.
Hays County commissioners have been presented with plans for a 96-acre CloudBurst data center “but no action has been taken” as of October 10, according to Hays County Commissioner Debbie Ingalsbe.
During the commissioner’s court meeting May 20, many members of the public expressed opposition to the proposed plans.
“The county is governed by Section 232, Local Government Code, and although we may be opposed, or otherwise, if a development has complied and met our county regulations, the code states we shall approve such plat,” explained Ingalsbe.
Bosque County
Bosque County commissioners gave both CyrusOne, a data center, and Calpine Corporation, America’s largest generator of electricity from natural gas and geothermal resources, a tax abatement to build the data center and expand energy generation to support it.
The $1.2 billion project is being backed by BlackRock and KKR. These investment firms will provide financial assistance for the end goal of a return on investment—in other words, profit.
Calpine Corporation plans to expand the existing Thad Hill Energy Center, adjacent to the data center site, to support the data center’s demand.
Thad Hill is a natural gas power plant with a capacity of 250MW with a planned increase to ~9,000 MWs of generation.
Bosque County Commissioner Billy Hall of precinct 1 told Texas Scorecard, “[The Calpine spokesperson] assured me that [the] residence electric bill will not go up. I hope they stay with that.”
“Calpine suggests that local electricity will not go up on rates, because [the] data center and [Calpine] are trying to be good neighbors,” said Larry Phillip, Bosque County commissioner for precinct 3.
As previously reported by Texas Scorecard, experts assert it is “impossible to accommodate the growth in AI data [centers] and maintain grid stability without prices increasing for all customers” in deregulated electricity markets like Texas.
