# Texas Should Supercharge Private Grids In the new era of private grids, Texas can build them bigger, better, faster August 27, 2026 • Commentary By [Travis Fisher](https://www.cato.org/people/travis-fisher) This article appeared on [*RTO Insider*](https://www.rtoinsider.com/) on August 26, 2026. Texas is ground zero for today’s grid dilemma: Slow access to juice is starving economic growth, but aggressively changing the power grid could be costly and dangerous. Policymakers like Gov. Greg Abbott (R) are right to be about making big moves on the power grid. (See [*Texas Gov. Abbott Halts ERCOT Batch Studies Process*](https://www.rtoinsider.com/138282-texas-gov-abbott-pauses-ercot-batch-process/).) However, they can give developers of industrial projects — from data centers to manufacturing to mining — the “speed to power” they need while keeping the grid affordable and reliable for existing customers. All they have to do is remove barriers to private grids. The regulated grid can’t keep up, so businesses are innovating. New grids that are privately financed and operated separately from the shared grid are a solution that has emerged organically. Large customers like hyperscalers (the largest-scale tier of data center operators) have figured out that, in some cases, building new electricity networks is the only way to get electric service fast enough to suit their ambitions. The off-grid future is not only possible — it’s becoming mainstream. My team at the Cato Institute is tracking dozens of off-grid construction sites across the country, including in Ohio, West Virginia, New Mexico and Utah. A 200-MW off-grid data center owned by an affiliate of Meta recently came online in Ohio, marking the beginning of the off-grid era. That project, called [*Socrates*](https://www.linkedin.com/posts/williams-company_americas-next-chapter-of-growth-needs-energy-activity-7496707457273151488-4w0K/), should be a wake-up call for critics who say powering data centers on a private grid is impossible. Texas could lap the field in this new off-grid race for AI dominance. Amazon is the sole customer at the [*Gigawatt Ranch*](https://www.pacificoenergy.com/gw-ranch) project, a massive off-grid facility under construction in Pecos, Texas. Microsoft is the sole customer at a site named [*Project Kilby*](https://kilby.com/), which also is in Pecos, a part of West Texas that offers ample land and low-cost energy. As [*one article*](https://energydigital.com/news/project-kilby-chevron-microsofts-data-centre-power-deal) summed it up, the approach taken with Project Kilby “allows companies like Microsoft to sidestep lengthy grid interconnection queues that have slowed other large projects.” **Let Developers Scale** Everything is bigger in Texas. Gigawatt Ranch isn’t just a clever name — the proposed [*7.65 GW* ](https://energydigital.com/news/amazon-to-build-uss-largest-gas-plant-to-power-data-centres)of planned on-site power would make it the largest private network in the United States and the largest single power plant. In fact, it would be approximately 1/12 the size of the Texas grid. For reference, peak demand in [ERCOT](https://www.rtoinsider.com/category/rto/rto-ercot/) is about [*91 GW*](https://www.ercot.com/gridmktinfo/dashboards/supplyanddemand). In other words, a dozen Gigawatt Ranch-sized projects could match the size of the Texas grid. But Texas law prevents these super-grids from serving more than one customer at a time. Private networks could scale up significantly by welcoming new customers. Developers also could connect with other private networks, forming even larger independent grids. The bigger the independent grids, the lower their operating costs, the greater their reliability and the smaller the environmental impact per gigawatt served. In the new era of private grids, Texas can build them bigger, better, faster Under today’s rules, builders can’t form such grids without subjecting themselves to public utility regulation. And no business interested in speed wants to entangle itself in public utility regulation because the process would be bureaucratic, slow and subject to the whims of politicians. The simple language in this [*model bill*](https://alec.org/model-policy/act-to-allow-for-consumer-regulated-electric-utilities/) would enable speed, scale and reliability while avoiding unnecessary oversight by state regulators. **Give Developers Certainty** Imagine making a final investment decision on a multibillion-dollar project today. That development may not begin service for about three years, just in time for a newly elected president to change the rules of the public grid. For example, Rep. Alexandria Ocasio-Cortez (D) recently [*took the lead*](https://kalshi.com/markets/kxpresnomd/democratic-primary-winner/kxpresnomd-28) in the Kalshi prediction market regarding who will be the 2028 Democratic presidential nominee. In June, Ocasio-Cortez introduced the [*AI Data Center Moratorium Act*](https://ocasio-cortez.house.gov/media/press-releases/ocasio-cortez-introduces-house-version-ai-data-center-moratorium-act), which would prevent the construction of new data centers. But if Ocasio-Cortez were to become president, she wouldn’t need to convince Congress to pass her bill. She could issue a Day 1 executive order establishing a grid emergency and ordering [FERC](https://www.rtoinsider.com/category/rto/rto-public-policy/rto-ferc-federal/) to pause all new grid interconnections for data centers. Such an order could build on the record established by the [NERC](https://www.rtoinsider.com/category/ero/ero-nerc-committees/), which has [*issued warnings*](https://www.nerc.com/newsroom/nerc-issues-level-3-alert-reliability-guideline-focused-on-large-load-challenges) that “the grid faces unprecedented challenges from a surge in large power consumers,” emphasizing the need to “address immediate risks posed by computational loads interfacing with the \[bulk power system\].” Perhaps the action would be litigated, but the irreversible effect — regardless of the outcome in the courts — would be a depth charge sinking the data center industry as we know it. And no, Texas would not be exempt, because [*Section 215*](https://www.law.cornell.edu/uscode/text/16/824o) of the Federal Power Act (the section covering grid reliability standards) applies to ERCOT and the entire Lower 48. The only way for Texas to keep the data center boom alive despite an antagonistic president would be to allow new networks to flourish — new grids that are further removed from the federal jurisdiction that accompanies the interconnected, public grid. **Let the Grid Catch Up** What if we have another supportive president in 2029? Aren’t there on-grid reforms that can help? Although most developers of off-grid projects would like to connect to the broader grid eventually, they are more than happy to operate on an island if the alternative is to sit idle. Power networks feature economies of scale, meaning bigger generally is cheaper. The public grid typically is more reliable because a system with thousands of generators can tolerate more equipment failures than a system with mere dozens. But one thing today’s heavily regulated grids cannot offer is the speed the technology industry needs. That’s because, when it comes to governing the public grid, speed always takes a back seat to reliability and cost. And policymakers’ focus on reliability is more than appropriate. Texans who lived through the four days of outages caused by Winter Storm Uri in 2021 understand the need for a grid that’s always on. Power curtailments contributed to more than [*200 deaths*](https://www.texastribune.org/2022/01/02/texas-winter-storm-final-death-toll-246/) and untold suffering as many families burned whatever they could to stay warm. (See [*With Crisis Behind it, ERCOT Now Faces the Music*](https://www.rtoinsider.com/19904-with-crisis-behind-it-ercot-now-faces-the-music/).) In Texas fashion, ERCOT has come back stronger and now faces some of the fastest demand growth seen in modern times. But even in Texas, it’s [*unclear*](https://www.texastribune.org/2026/08/24/texas-765-transmissions-lines-data-centers-pauses-delays/) whether the transmission lines the broader grid needs can be built. If they can, the projects going off-grid today can always connect in a decade once the new lines are placed in service. If they can’t, Texas should set up a [*parallel path*](https://www.cato.org/briefing-paper/case-consumer-regulated-electricity-private-electricity-grids-offer-parallel-path) for grid development that features many fast-moving new grids rather than one public grid stretched to its limits. **Conclusion** Texas can attract the incredible economic growth that comes with the data center buildout. If Texas supercharges private grids, many of the large customers waiting in queues in other states — and other countries — would change their plans and come to Texas instead. In the new era of private super-grids, Texas can build the future bigger, better and faster than anywhere else. ##### About the Author [![Travis Fisher - cropped](/sites/cato.org/files/styles/author_picture/public/2023-09/travis-fisher-cropped.jpg?itok=wFuUAHy-)](/people/travis-fisher) ##### [Travis Fisher](/people/travis-fisher) Director of Energy and Environmental Policy Studies, Cato Institute [ ](https://x.com/ts_fisher)