Texas House State Affairs Hearing: Data Centers and 765-kV Transmission Lines
Texas doesn’t have to choose between protecting the grid and keeping economic growth.
In testimony to the Texas House State Affairs Committee, we make the case for Bring Your Own Power (BYOP): let large new loads that need speed build independent power systems with private capital, private risk, and no cost shift to existing Texans.
Protect the grid. Expand the map of opportunity. Keep the growth in Texas.
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Written Testimony of Glen Lyons
Texas House Committee on State Affairs
August 19, 2026
Interim Charges: Data Centers and 765-kV Transmission Lines
Chairman King, Vice Chair Hernandez, and Members of the Committee:
My name is Glen Lyons. I’m a Houstonian, founder of Advocates for Consumer Regulated
Electricity, retired after 37 years at Exxon Mobil Corporation, and a former member of the
ERCOT board.
When I appeared before this Committee earlier this year, I put Texas’s large-load challenge
simply: “Take new demand off the grid without taking growth off the table.” The issues
before you today make that idea even more relevant.
Most of the data-center debate assumes these enormous new loads will connect to the
existing grid. From there, Texas must decide how to study them, allocate their costs, build
transmission, manage reliability risks, and address community impacts.
Bring Your Own Power, or BYOP, changes that first assumption.
Under BYOP, a new data center or other large nonresidential customer could contract with
a private developer for an independent power system serving one or more customers. The
system would be physically islanded from ERCOT or another regulated grid and financed
through private capital and contracts. Its investors, not captive ratepayers, would bear its
commercial risk. It would receive no eminent-domain authority and remain subject to
generally applicable safety, environmental, land-use, and contract laws.
First, it improves grid planning and reliability. SB 6 and ERCOT’s Large Load Batch Study
Process seek to make grid-connected growth more manageable. BYOP asks a different
question: Which new loads need to connect to the grid at all?
Texas is confronting more large-load demand than ERCOT can reasonably incorporate on
the timetable many of these businesses require. Transmission, generation, and
interconnection processes take time. Some customers can wait. Others cannot. BYOP
gives the latter another choice: if you need power faster than the grid can provide it, bring
your own—without making existing Texans pay for your speed. That means Texas does not
have to choose between protecting the grid and losing investment to another state.
A fully islanded load does not have to wait for ERCOT to make room for it, nor does ERCOT
have to interconnect, balance, or curtail it. It is one less large, uncertain load for grid
planners to absorb.The same logic applies to 765-kV transmission. BYOP does not eliminate the need for
transmission investment. Texas must continue strengthening the grid that serves Texans.
But every large new load served independently is load the existing system does not have to
accommodate, reducing pressure on transmission planning and the risk of building long-
lived infrastructure around large-load forecasts that may change.
Second, BYOP protects families and small businesses while preserving economic growth.
Nicole Nosek, founder and chair of Texans for Reasonable Solutions, and I made this point
in our Austin American-Statesman op-edi: Texas should welcome the investment, jobs, tax
base, and technological leadership data centers can bring without automatically placing
the cost risk on existing customers.
BYOP lets companies that value speed to power pay for that speed themselves. If ERCOT
can serve a project economically and on the customer’s timetable, the grid remains an
attractive option. If it cannot, Texas should not tell that company, in effect, “wait several
years or go elsewhere.”
Give it a third choice: build the power you need, bear the risk yourself, and bring the
business and tax revenue to Texas anyway.
That is pro-growth and pro-ratepayer at the same time.
Third, BYOP can spread economic development to communities that actually want it. Grid-
connected projects naturally gravitate toward available transmission capacity, substations,
and other grid infrastructure, concentrating enormous new loads in the same corridors and
communities.
Off-grid projects can look beyond those corridors for communities, landowners, and local
governments that want the investment, construction activity, jobs, and tax base. Other
siting requirements still matter, of course, but transmission availability no longer dictates
the map.
The model is different: go where you are wanted, reach voluntary agreements with
landowners, solve your own infrastructure needs, and bring the economic benefits with
you. BYOP should receive no eminent-domain authority and remain subject to generally
applicable safety, environmental, and land-use laws.
Fourth, BYOP creates an innovation channel Texas does not have today. In my Texas Policy
Research essay, “Texas Needs a ‘Shale Revolution’ in Electricity,”ii I argued that shale’s
lesson was not one particular technology, but allowing entrepreneurs to take risks, test
competing ideas, fail with their own money, and scale what works.BYOP could do the same for electricity—natural gas, geothermal, nuclear, solar and
storage, new system designs, and combinations we have not yet imagined—without
making ERCOT customers bear the experimentation risk. Successful ideas can eventually
migrate back to the larger grid, improving it for all.
Travis Fisher and I lay out the broader framework in the Cato Institute briefing paper, The
Case for Consumer-Regulated Electricity: Private Electricity Grids Offer a Parallel Path to
Energy Abundance.
iii The principle is straightforward: when sophisticated customers
voluntarily choose a physically separate power system, economic regulation designed to
protect captive utility customers serves far less purpose.
The Committee’s charge recognizes that data centers matter to Texas’s competitiveness
and national security. But potential demand is too great to assume ERCOT can
accommodate every project on the timetable the market demands.
Texas does not have to choose between overloading the grid and turning economic growth
away. It can create another path.
Let ERCOT serve the growth it can serve well. Let private investors serve additional growth
outside the grid. And let those projects seek out Texas communities that want the
investment rather than forcing every project toward the same transmission corridors.
Give large new customers the legal option to build beside the grid, on their own dime and at
their own risk.
Protect the grid. Expand the map of opportunity. Keep the growth in Texas.
i https://www.statesman.com/opinion/columns/your-voice/article/bring-your-own-power-texas-data-
centers-22230760.php
ii https://www.texaspolicyresearch.com/glen-lyons-texas-needs-a-shale-revolution-in-electricity/
parallel-path
