00:00So many Texans turned up to testify about data centers that lawmakers had to open to overflow rooms at the
00:08Capitol.
00:09A judge stopped one North Texas town from voting on a project 500 feet from people's backyards.
00:17And the state's own grid operator now says it will take until December just to count what is coming.
00:24We begin in Austin, where a House state affairs hearing on data centers drew such a crowd that lawmakers opened
00:31to overflow rooms inside the Capitol complex.
00:36Susan Tatro, who lives on four acres in unincorporated East Williamson County, told the committee a third data center could
00:44be approved within a mile of her home, one of them roughly 200 feet from her property line.
00:51She talked about lights, noise, water, her ducks, her egrets, her neighbor's cattle, and the springs she is afraid of
01:00losing.
01:01Kyle Workman, a commissioner from Leon County, put the structural problem plainly.
01:08Counties hold no regulatory authority over unincorporated land.
01:12So the people closest to these projects have the least say in them.
01:16Chairman Ken King capped testimony at six hours.
01:21That frustration is already landing in the courts.
01:25Because in Tarrant County, a judge has stopped a data center vote in its tracks.
01:31District Judge Kimberly Fitzpatrick signed a temporary restraining order barring the town of
01:37Westlake from voting on, approving, adopting, or taking any action to implement Resolution 26-25.
01:47The development agreement behind the Circle T Data Center.
01:51The order landed while a special meeting was already underway.
01:55It came at the request of the lakes at Marshall Ridge Homeowners Association in neighboring Keller,
02:01whose members argued the project would cause immediate harm to their properties.
02:07The site sits inside Westlake Town limits but at the northern edge of Keller,
02:12roughly 500 feet from several residences' backyards.
02:16The plaintiffs allege the town failed to give legally required public notice on an earlier zoning
02:22action.
02:24A hearing follows.
02:26But lawsuits cut both ways.
02:29A case study circulating among state policy analysts this week retraces what happened in
02:35Hill County, a county of about 35,000 people north of Waco.
02:40In May, commissioners passed a one-year moratorium on data center construction in unincorporated
02:47areas.
02:47The first county-level ban of its kind anywhere in Texas.
02:52Twenty-three days later it was gone.
02:55A developer, RCM Hill, filed suit in federal court in Waco seeking $100 million in damages.
03:04Arguing the moratorium was illegal under state law and that the officials who voted for it
03:09knew.
03:09That when they cast their votes.
03:12On June 4th the commissioners' court voted unanimously to rescind.
03:17Replacing the ban with a disclosure checklist Tom Green County.
03:22Watching from West Texas.
03:24Quietly dropped its own moratorium plans.
03:27The developer dismissed the case in July.
03:30Behind every one of these fights sits the same constraint.
03:34Power.
03:35And the scale of that constraint got clearer this week when ERCOT chief executive Pablo
03:41Vegas sat down in front of the same House committee.
03:45Vegas said the grid operator is now working through roughly 200 gigawatts of potentially
03:51eligible large load.
03:54The audit Governor Abbott ordered at the start of the month.
03:57Covering somewhere between 250 and 300 proposals.
04:02Most of them data centers.
04:04To put 200 gigawatts in perspective.
04:08ERCOT's all-time demand record is 91 gigawatts.
04:12Set on the 22nd of July.
04:15The agency will request information from every data center expected to draw 25 megawatts.
04:22Or more.
04:23And Vegas told lawmakers the audit will not be finished until late November or early December.
04:29The batch study that determines transmission cost is postponed until then.
04:35Power is only half the problem.
04:37Though.
04:38The other half is water.
04:41And Texas regulators admitted in that same hearing that they do not actually know how much of it.
04:46Data centers are using.
04:48Robert Sadlier, deputy director of the Water Quality Division at the Texas Commission on Environmental Quality,
04:56told lawmakers that data centers and similar facilities are not required to state how much water they need when they
05:04apply for a permit.
05:06The Public Utility Commission is the only agency currently collecting that data at all.
05:11Temple McKinnon of the Texas Water Development Board said her agency's survey response rate had.
05:18Climbed to 29% of 341 data centers.
05:23Up from 17% back in June.
05:26And she noted the survey only covers facilities that already exist.
05:31Not the ones being proposed.
05:33Some governments are done waiting for the numbers.
05:37In Florida, Volusia County has skipped straight past the pause.
05:42Council members were handed a proposal for a six-month moratorium on artificial intelligence data centers
05:50and instead directed staff to draft an outright, permanent prohibition,
05:56voting unanimously to ban large-scale data centers across unincorporated Volusia County.
06:02The ordinance defines a large-scale facility as any single site with an anticipated monthly peak.
06:09Load of 50 megawatts or more.
06:12Official sited water resources.
06:15Noise.
06:16Infrastructure strain and incompatibility with neighboring land uses.
06:21Noting these facilities run continuously and need extensive electrical systems.
06:26Cooling equipment and backup generators.
06:29The county is leaning on authority the state handed local governments earlier this year.
06:35And inside the same county, the city of Edgewater has pushed a permanent ban of its own onto the November
06:42ballot.
06:43Yet the build-out keeps finding new ground.
06:47Because on the very same day Texans were packing that Capitol hearing room,
06:52Amazon confirmed it is building a multi-billion dollar advanced robotics manufacturing facility in
06:59East Austin.
07:01The plant will anchor the newly annexed Dog's Head District.
07:05Sited off her Gots and Dalton Lanes near the center of a stretch of land covering more than
07:102,600 acres.
07:13It will produce the robotics systems that work alongside Amazon warehouse employees on repetitive
07:19tasks and heavy lifting, adding somewhere between 300 and 500 manufacturing and engineering jobs to the
07:27more than 17,000 people Amazon already employs in the city.
07:33Notably, the company put no figure on it
07:36and asked for no economic incentives and no public money for the facility itself.
07:41The capital behind all of this, though, is getting more expensive.
07:47And that brings us to the kicker.
07:50Nebius Group announced a proposed private offering of $4.5 billion in
07:55convertible senior notes.
07:58$2.75 billion due in 2030 and $1.75 billion due in 2034.
08:05With an option for initial purchasers to take another $675 million.
08:11The proceeds are earmarked for data center construction and build-out.
08:16Expansion of the company's footprint.
08:19Procurement of components including graphics processors.
08:23And its artificial intelligence cloud platform.
08:26Investors were not thrilled.
08:28The stock dropped roughly 14% intraday on the news.
08:32It is a reminder that the market which has been rewarding every gigawatt announcement is starting
08:38to ask harder questions about who ultimately pays for them.
09:02and fundamentally, the customers are doing the full time today.
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