⭐ Morning Briefing — September 25, 2026

Top Story: Attorney General Ken Paxton opened an investigation into hundreds of data center developments across 18 Texas counties — Dallas and Tarrant among them — that never answered the state's legally required water-use survey. The Dallas Morning News described it as an initial criminal investigation.

📰 Today's News

1. 🚨 Paxton Opens a Statewide Probe of Data Centers That Skipped the Water Survey

Paxton's office announced Thursday that it is investigating "hundreds" of data center developments that haven't responded to the Texas Water Development Board's annual water-use survey. State law requires the survey of entities using ground or surface water for municipal, industrial, power-generation or mining purposes. The office is demanding that every data center in the state file a complete response.
Data centers in 18 counties are under initial investigation: Harris, Montgomery, Travis, Dallas, Tarrant, Smith, Bexar, Tom Green, Potter, Randall, Lubbock, Midland, Ector, Wichita, Victoria, Brazos, Nueces and El Paso. The announcement didn't name individual companies or say which Tarrant County sites are involved, the Fort Worth Report noted. Entities that skip the survey lose eligibility for water board financial assistance and water rights permits.
A water board official recently said fewer than 30% of data centers answered the survey. The Dallas Morning News added that no state agency keeps a complete inventory of Texas data centers, so many operators may never have been contacted at all. The Fort Worth Report said the board's 2025 results already rank the QTS and Meta facilities in Fort Worth among the state's heaviest water users.
Paxton, the Republican U.S. Senate nominee, framed it as land stewardship: "We cannot sacrifice our resources, water, or energy supply." His Democratic opponent, James Talarico, responded in a statement carried by KAUZ, saying Paxton "has taken nearly half a million dollars from data center interests" and is "changing his tune" 40 days before Election Day.

Today's Signal: The survey has carried a penalty all along, and fewer than 30% of data centers filed anyway. With the water board under orders from Abbott to enforce it, TCEQ holding permits and now the attorney general investigating, three state offices are working the same unanswered form in the same month, just ahead of an election.

2. ⚖️ Judges Tell the PUC: Meta's El Paso Gas Plant Only If Ratepayers Never Pay

Two administrative law judges at the Public Utility Commission issued a proposed decision Wednesday on El Paso Electric's application to build the McCloud facility. The plant would be made of 813 modular gas generators from Enchanted Rock and would sit next to Meta's $10 billion, 1-GW data center under construction in northeast El Paso. The judges recommended approval only if the utility holds its customers harmless from the plant's capital and operating costs, and denial otherwise.
Judges Cassandra Quinn and Arthur D'Andrea found that El Paso Electric didn't adequately weigh alternatives, didn't issue a request for proposals and didn't do a cost-benefit analysis. They wrote that the project choice "was driven by Wurldwide's prescribed timeline and preferences"; Wurldwide is the Meta subsidiary named in the case. The utility had proposed that Meta pay for five years and that the plant then shift to the broader system, where ratepayers could share its roughly $500 million cost. The five commissioners have not scheduled a vote.
The Meta campus sits outside ERCOT, on the Western Interconnection, so Abbott's August interconnection audit doesn't reach it, and McCloud already holds its TCEQ air permit. TCEQ told Inside Climate News only that it will give the governor's office "a full update on compliance" by Oct. 19.
Just across the state line, Oracle sent a force majeure notice to Stack Infrastructure, the developer of the Project Jupiter campus near Santa Teresa, N.M., El Paso Matters reported, citing Bloomberg. The notice would let Oracle defer rent for up to three years if the campus's power isn't ready. The 2.45-GW fuel-cell plant still lacks its New Mexico air permit, and Dallas-based Energy Transfer has pushed the in-service date for its supply pipeline to February. Oracle says the project remains on schedule.

Today's Signal: The judges' condition is the same principle behind every "data centers must pay their own way" order Abbott has issued this summer, applied to a utility that sits outside ERCOT's rules. El Paso Electric can still own the plant. The question is who pays for it after year five.

3. 🧊 TCEQ Says the Freeze Covers Any Permit for Supporting Infrastructure, but Not Where It Stops

In an email to TechTarget, TCEQ external relations director Ryan Vise said the agency has paused all air and water permits and other authorizations "for the construction or development of infrastructure directly supporting data centers." The agency still hasn't said whether that reaches projects outside ERCOT's review.
ERCOT is running two separate processes. Its State and Community Impact RFI covers data centers with at least 25 MW of peak requested load seeking an ERCOT connection, and responses are due Oct. 12. The Batch Zero eligibility check is a separate review of large-load projects. ERCOT spokesperson Trudi Webster confirmed the RFI won't go to anyone not interconnecting to the ERCOT system. That leaves off-grid and non-ERCOT projects with no ERCOT review for TCEQ to wait on.
Campaigning in Sherman on Thursday, Abbott said he wants local residents, working with their city and county officials, to decide whether a data center comes to their community, adding that "what may be wanted in Grayson County may be different than what's wanted in some other county," KXII reported.

Today's Signal: TCEQ says it will wait for ERCOT's findings, and ERCOT isn't collecting findings on projects outside its grid. For the El Paso and off-grid projects, TCEQ's Oct. 19 update is the only place an answer can come from.

4. ⛏️ CyrusOne Pitches a $2.6 Billion Gas-Powered Campus on a Contested East Texas Mine Site

CyrusOne held a community meeting Thursday night at the Hopkins County Civic Center on a potential multi-building campus on the former Thermo mine just outside Sulphur Springs, KLTV reported. The company put the possible investment at $2.6 billion, with 30 to 40 permanent jobs per building and more than 1,000 construction jobs over several years. It said the campus would generate its own power from natural gas, might later connect to the grid, and would pay for any infrastructure upgrades. Each building would use roughly 1,000 gallons of water a day.
The site comes with a lawsuit. The former landowner is suing the city of Sulphur Springs and MSB Global, the site's previous developer, arguing that the land deed bars power generation. A judge has ordered no power generation on the property while the case heads to trial next year. CyrusOne's Gene Alessandrini said that if the dispute has to be resolved through litigation, it "would just push the data project out."
Residents pressed on noise; one said they can hear Interstate 30 from four miles away. CyrusOne said the facility would run at about the volume of a normal conversation and promised another meeting before any announcement.

Today's Signal: A gas-powered campus proposed on land where a judge has barred power generation until trial next year may not be able to start soon, whatever the state decides this fall.

5. 💰 Two Developers Line Up Money and Operators While Permitting Stalls

Fermi America said Thursday that CBRE will be the exclusive operations and maintenance provider for building one at Project Matador, its behind-the-meter campus near Amarillo, under a five-year renewable agreement. Fermi says the first Siemens Energy turbines arrived on site this month. It signed TensorWave as its first tenant in August, and it has put more than $1.5 billion into the buildout so far.
New Era Energy & Digital, two days after announcing its 20-year Vistra power deal for its Ector County campus, filed an 8-K Sept. 24 setting up an at-the-market program to sell up to $100 million in common stock through Mizuho and five other agents, for general purposes including capital spending and possible debt repayment.

Today's Signal: Both companies are paying for the next step (operators, turbines, equity) while TCEQ's freeze on data-center permits is still in place.

TCEQ's freeze didn't produce any new filings in the eight tracked DFW counties, ERCOT issued no new releases, and no DFW city or county took a zoning vote today.

📍 Today's Watch List

Whether Paxton's office names specific companies or sites in its water-survey investigation, and how many developers file late survey responses under pressure from both the attorney general and the water board.
The PUC's still-unscheduled commission vote on El Paso Electric's McCloud plant, and whether the utility accepts the judges' hold-harmless condition.
ERCOT's Oct. 12 deadline for State and Community Impact RFI responses from data centers of 25 MW or more.
TCEQ's Oct. 19 compliance update to the governor, and whether it says how the freeze applies to projects outside ERCOT.
CyrusOne's promised second Sulphur Springs meeting, and the Hopkins County deed lawsuit's trial next year.
Public comments on FERC's environmental assessment of Energy Transfer's Green Chile pipeline to Project Jupiter close Oct. 5.
Dallas: whether Mayor Eric Johnson refers the five-member hyperscale moratorium memo to committee within the requested 30 days.
ERCOT's December 10 audit report to the PUC. No material movement is expected before the December PUC meeting, so this stays at the bottom of the list until that date approaches.