Texas House lawmakers initially approved on May 26 a pair of bills aimed at ensuring the state’s power grid and water systems can withstand continued population growth.
“The Texas economic miracle, it needs three ingredients to happen: it needs a qualified workforce, a dependable electric grid and reliable water infrastructure,” Jeremy Mazur, a policy director for the nonpartisan think tank Texas 2036, said during a March 3 panel at the state capitol.
At a glance
Senate Bill 6 would increase regulations on data centers and other large electric consumers. Proponents of the legislation have said the tighter standards would make the grid more reliable and ensure large consumers are held accountable.
“We have single customers coming to Texas with an electric demand that surpasses the size of cities’ needs,” bill sponsor Rep. Ken King, R-Canadian, said during a May 7 committee hearing. “Within the next few years, the entire [Rio Grande] Valley has an electrical peak demand of three gigawatts. Stargate in Abilene has electric demand projected to be twice that in 2030.”
Senate Bill 7 would help communities create new water supplies and repair aging water systems alongside House Joint Resolution 7, a proposed constitutional amendment. State senators unanimously approved the constitutional amendment, which would create a dedicated funding stream for water supply projects, on May 27.
“Each of our districts have their own water infrastructure challenges. ... The perpetuation of Texas' economic miracle depends on the reliability of our water infrastructure,” Rep. Cody Harris, R-Palestine, said on the House floor May 26.
The proposals received bipartisan support from House lawmakers May 26, with a final procedural vote required on each bill before they can return to the Senate with amendments. Texas’ 140-day regular legislative session ends June 2.
Put in perspective
Demand on Texas’ power grid reached a record 85,508 megawatts in August 2023, and the Electric Reliability Council of Texas has estimated it will grow to about 150,000 megawatts by 2030. Lawmakers have said SB 6 would help ERCOT better forecast electric demand by removing “hypotheticals” and ensure the state is prepared for future grid emergencies, while critics said it could negatively affect public safety and deter new businesses from coming to the state.
Texas’ population surpassed 31 million in 2024, state demographer Lloyd Potter told attendees at the Water for Texas conference in January. The state gained about 1,500 people per day in 2023-24, Potter said, noting that most of the growth occurs when people move to Texas from other states or countries.
“When we grow from migration, that's what puts stress on our infrastructure,” Potter said.
Sen. Charles Perry, a Lubbock Republican who authored SB 7, said in January that water, energy and transportation make up a “three-legged stool” of Texas’ top infrastructure needs.
“[Water] is the last piece of the three-legged stool, and when we get it right, y’all will never have to worry about living anywhere but Texas,” he said.
A closer look
One of the primary goals of SB 6 is to rework how Texas handles power grid emergencies. The bill would direct customers that use at least 75 megawatts of power, such as data centers and industrial projects, to switch to backup generators to reduce strain on the grid during extreme conditions. Large electric customers would also need to install equipment allowing the state to remotely disconnect power from their facilities, known as a “kill switch” provision.
King said May 26 that these provisions would encourage large customers to rely fully on backup power during emergencies.
“We certainly don't want large-load customers that sometimes are data centers for military operations to just be without power,” King said.
During a Senate committee hearing in February, critics of SB 6 said allowing the state to shut off electricity for large consumers could impact public safety.
“[Data center clients] include a range of essential services such as federal, state and local governments, law enforcement, cybersecurity [and] hospitals,” Dan Diorio, a senior policy director for the Data Center Coalition, said Feb. 27. “They require and depend on the data center to maintain constant uptime, to provide uninterrupted services. Even a momentary interruption of that service can have significant consequences.”
SB 6 would also adjust how ERCOT measures future electric demand. Large customers that intend to join the state grid would be required to notify ERCOT if they are considering taking their projects to other states and pay their local utility company a $100,000 fee before the planning process begins.
On the House floor, Rep. Trent Ashby, R-Lufkin, noted that SB 6 was not designed to “slow down large-load projects that are currently in the works.”
More details
New water supply projects take decades to complete, Perry said in March, noting that “just because the money's available doesn't mean we're going to solve [the problem] tomorrow.”
“Farmers are already running out of water,” Perry said. “The state’s only sugar mill closed last year due to water scarcity. Cotton, grain and rice growers in several regions of our state are planning on less production each year. ... [Manufacturing] site selectors are debating whether Texas will have enough water if they come to build their factories.”
Since 2021, several Texas cities, including Dripping Springs, Conroe and Magnolia, have paused new development for a temporary period to prevent water shortages.
The Texas Water Development Board’s state water plan estimates about 51.5 million people will live in Texas by 2070, up from 31.3 million today. In that period, demand for water is expected to increase by 9% and existing water supplies are projected to decline by 18%, according to the plan.
HJR 7, the constitutional amendment associated with SB 7, would send $1 billion annually in sales and use tax revenue to the Texas Water Fund, a state account created in 2023 to help finance water projects. Senators have through May 28 to vote on that proposal, which passed the House in April.
