Data centers driving artificial intelligence, crypto mining, data storage, and processing continue to generate significant discussion across Texas and the nation. I briefly touched on this topic earlier this year, and a member’s question at our Annual Meeting served as an important reminder to keep it front of mind and continue communicating with our membership as the conversation develops.
WHY THE TOPIC MATTERS
The member asked what impacts we might expect from the growth of these facilities and what GVEC is doing to mitigate any potential negative effects. It was a timely question, and one GVEC is happy to discuss. There is a great deal of information circulating about data centers, but there is also misinformation. Our goal is to provide members with clear facts and explain how these projects would be evaluated before they could connect to our system.
Texas remains an attractive State for large data center development, but these projects are not going to appear overnight. Data centers can require extremely large amounts of electricity, and the grid cannot accommodate loads of that size unless the necessary infrastructure is in place.
PLANNING BEFORE CONNECTION
That is why any potential project must undergo significant study and review. GVEC is speaking with several entities interested in locating large loads within our service territory, but those conversations are only the beginning of a lengthy process. In this context, when I refer to large loads, I mean those that are 75 MW or greater, which is how the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) define them. GVEC, the requesting company, transmission providers, and ERCOT must evaluate whether the proposed location can support the load and determine what upgrades would be required.
In many cases, new transmission lines, substations, or other major improvements would need to be completed before a facility could connect to the grid. Data centers can’t simply connect to the grid and come online; these projects require extensive planning, regulatory approval, construction, and investment. Generation resources must also be available to support the additional demand.
These issues are being discussed by ERCOT, the PUCT, state lawmakers, and electric providers across Texas. Data centers and other large loads are expected to remain a significant topic leading into the 2027 legislative session as policymakers consider how to support economic growth while maintaining grid reliability and protecting existing consumers.
Although one or more data centers could eventually locate within GVEC’s service territory, it will take years rather than months before that happens. There is simply too much planning and infrastructure work that must occur first.
I understand why these projects raise concerns, particularly regarding power supply, infrastructure costs, and their potential effect on local communities. Those concerns must be addressed before any facility is allowed to move forward.
BALANCING GROWTH AND RESPONSIBILITY
At the same time, we should not automatically assume every large-load project would be harmful. If planned and structured responsibly, a data center could provide economic opportunity and potentially benefit GVEC, its membership, and our communities. The key is to ensure the project does not compromise reliability, shift costs onto other customers, or move forward before the electric system is ready.
GVEC will continue evaluating each opportunity carefully and individually. We will ask the necessary questions, complete the required studies, and work with state and industry partners to ensure any new load can be served responsibly.
It is also important to know that any data center that connects to the GVEC grid will pay 100% of all costs associated with that data center and will not be passed on to any of our other members.
Our focus remains steady: protecting reliability and affordability for our members while thoughtfully preparing for the growth and opportunities that may come next.
As always, I welcome your feedback by phone at 830.857.1152, by email at [email protected], or by mail at P.O. Box 118, Gonzales, Texas 78629.
