Texas House State Affairs Hearing on Data Centers
I submitted the following comments to the House prior to the hearing.
To: Members of the Texas House State Affairs Committee
Re: Data Centers Interim Charge Public Hearing
Date: April 9, 2026
Chairman and Members of the Committee,
Thank you for the opportunity to submit comments in advance of the Committee’s hearing on data center development and the associated impacts on Texas’ electric system.
Texas is facing a structural mismatch: data center and AI infrastructure can be deployed in months, while power generation and transmission infrastructure take years to build. This gap is already creating reliability risks and upward pressure on electricity prices. The North American Electric Reliability Corporation has warned that large loads are increasing in scale and complexity and that existing frameworks are not adequate to address the risks. Similarly, the Federal Reserve Bank of Dallas has found that even modest data center growth could substantially raise retail electricity prices.
The core issue before the Committee is how to manage this difficult challenge. Under the current framework, large new loads can drive the need for significant infrastructure investment, while those costs are often borne broadly by all ratepayers. This raises concerns about affordability, fairness, and long-term system stability.
Bring Your Own Power (BYOP) offers a practical solution. BYOP allows power developers and entrepreneurs to build new, cutting edge, off grid electricity systems for large, sophisticated customers, such as data centers. As described by the American Legislative Exchange Council, this approach enables development “without shifting financial or reliability burdens” to other consumers.
BYOP directly aligns with the Committee’s priorities:
• Global Competitiveness: Projects can proceed without waiting for transmission expansion or interconnection delays and rapidly deploy cutting edge technologies
• Security: More grids are inherently more secure by diversifying risk
• Reliability: Every megawatt served outside the grid reduces strain on ERCOT and the state’s utilities
• Affordability: No cost shifting to Texas families
• Local Control: BYOP projects have no eminent domain authority and rely entirely on voluntary agreements with private landowners
The market is already moving in this direction. A growing share of new power capacity is being built specifically to serve data centers on-site, and companies such as Microsoft are pursuing off-grid strategies to bring capacity online faster and limit strain on local grids.
Texas is well-positioned to lead this transition. Existing utilities, their affiliates, energy companies, and data center developers all have the capability to develop BYOP systems. Texas also has the energy resources. This is not a theoretical concept—it is already emerging in practice.
Beyond immediate benefits, BYOP creates long-term advantages for all Texans. These systems can serve as real-world testbeds for innovation including deployment of advanced nuclear technologies, generating insights that can be used to improve ERCOT and the utilities. BYOP systems may also find faster and lower-cost approaches to designing and operating a system.
The policy question is straightforward:
Should Texas continue to channel the rapid growth through the same systems that can’t keep pace without putting reliability at risk, or should it give those driving the demand the opportunity to consider new and independent power systems?
BYOP provides a voluntary path that supports economic growth, protects consumers, strengthens property rights, and maintains grid reliability—without requiring tradeoffs.
