⭐ Morning Briefing — September 29, 2026

(Tuesday, September 29, 2026)

Top Story: Denton's Planning and Zoning Commission voted 5-0 to end by-right data centers in the city. Every new project would need a specific-use permit, a 300-foot residential setback, water and wastewater studies and low-water cooling, with the City Council voting Oct. 13.

📰 Today's News

1. 🏛️ Denton Moves to Put Every Future Data Center Before the Council

The Denton Record-Chronicle reported Monday that the Planning and Zoning Commission voted unanimously last Wednesday to recommend amendments to the Denton Development Code. If approved, every warehouse-style data center would need a specific-use permit (SUP), even in the light industrial, heavy industrial and public facility districts where they're now allowed by right. They'd be barred entirely from the mixed-use regional, suburban corridor, highway corridor and general office districts.
The package raises the setback from residential uses from 100 to 300 feet. It also requires water and wastewater demand studies with each application and closed-loop or free-air cooling, and it bars a project from reaching the council agenda until it has its PUC and ERCOT approvals.
Mayor Pro Tem Nick Stevens, who first proposed Denton's moratorium, said he can't recall the council ever denying an SUP. He called the zoning changes useful for scrutiny but silent on grid and water capacity, which is what the moratorium is meant to study.
Denton Municipal Electric GM Tony Puente told commissioners that Core Scientific's 391-MW AI conversion is still under construction and that QumulusAI's approved 20-MW modular site hasn't broken ground. Neither project had to file water or wastewater studies, because no ordinance required them.
The amendments apply only inside city limits. Denton County Judge Andy Eads said Monday the county hasn't received a data center incentive application or development proposal in Denton's extraterritorial jurisdiction.

Today's Signal: An SUP requirement makes every new project a discretionary council vote, which Texas cities can impose inside their limits and counties generally can't. So the rules stop at the city line, in a county where Colovore's Alliance-corridor filing already sits outside them.

2. 💡 El Paso Wants a "Full Hold Harmless" Before Meta's Gas Plant Gets Built

El Paso City Council on Monday authorized the city attorney to keep negotiating a settlement with El Paso Electric over the 366-MW McCloud Generation Facility for Meta's Northeast El Paso data center. Council also authorized a counteroffer demanding a "full hold harmless" for ratepayers, KTSM reported. The El Paso Times puts the plant's cost at $551.8 million.
The city's ask goes beyond construction and operating costs. It also wants protection from lost revenue credits if power EPE now sells off-system gets redirected to Meta instead.
The Sept. 23 proposal for decision from two administrative law judges recommends approval only with lifetime protections that keep other customers off the hook, and denial without them. The judges also found EPE hadn't adequately weighed alternatives or shown McCloud was the most cost-effective option. The PUC's five commissioners are expected to issue a final order by Dec. 7.
EPE CEO Kelly Tomblin said the utility agrees with the city on large-load provisions and isn't trying to shift costs onto residential or other customers.

Today's Signal: The judges' finding that EPE didn't adequately consider alternatives gives the city leverage in settlement talks. It also answers yesterday's open question: the PUC's decision now has a Dec. 7 target.

3. 🗺️ One Big Site Slips Out of a City's Reach as Another City Tries to Take Control

PowerHouse Data Centers' nearly 900-acre project near Uhland now falls under Caldwell County's jurisdiction, the Austin Business Journal reported Monday, after the landowners petitioned to release the property from the city's extraterritorial jurisdiction under a state law that lets them do so. PowerHouse is also the developer behind Westlake's Circle T.
In Galveston County, League City Mayor Nick Long said Monday that a new ordinance with permitting requirements would let the city control where, how and whether data centers are built, The Daily News reported. The only data center in the county today is Dataprana's La Marque facility on FM 1764.

Today's Signal: The Uhland release shows the gap Denton's rules can't close. Landowners can petition out of a city's ETJ, and in Texas counties generally can't zone.

4. 💧 A New Water Coalition Launches, With Records in Hand

We the People Texas launched at the Capitol on Monday with the Texas NAACP, Save Rural Texas and the Texas Coalition Against Data Centers, KVUE and KXAN reported. The group is calling for a pause on, and review of, the water commitments tied to data center projects.
Texas NAACP President Gary Bledsoe presented records obtained through Public Information Act requests. He singled out new data centers drawing on the already-depleting Ogallala Aquifer and pointed to Hillsboro as an example of the municipal districts being created for these projects. He also called some of the water deals "sweetheart" arrangements with discounted rates.
Save Rural Texas co-founder Jet Parker said the state's own water plan shows a 3.6 million acre-foot shortfall in a drought year, mostly without counting data centers. The coalition wants counties to have the power to set water limits and require low-water cooling.
KVUE noted that Hood County, where developers have proposed eight data centers, asked the attorney general in February whether it could impose a moratorium and still has no opinion. The U.S. Senate is expected to vote as soon as Wednesday on the House-passed Ratepayer Protection Act, which targets data-center-driven power price increases.

Today's Signal: The coalition's asks, county water limits and cooling mandates, are what Denton is writing into city code this month. Counties still have no such power, and Hood County's request for an opinion on it has gone unanswered for seven months.

5. 🎙️ Paxton Calls His Data Center Position "a Yes With Conditions"

In an interview Monday with the U.S. Hispanic Business Council in Fort Worth, Attorney General and Republican Senate nominee Ken Paxton said there's "plenty of open space in Texas" for data centers. He said the answer "can't be a no" because of competition with China, the Houston Chronicle reported.
His conditions: keep data centers from raising grid rates for others, require them to recycle their own water, and avoid siting them "right next to somebody's house." His campaign plan also backs Abbott's proposed ban on AI data centers in rural neighborhoods.
The Chronicle noted that Paxton's office still hasn't said whether counties can block data centers locally, even though several counties have asked and his campaign plan supports it. Democrat James Talarico is due for his own interview with the council later this week.

Today's Signal: Paxton the candidate supports local control. Paxton the attorney general still hasn't issued the opinion that would say whether counties have it.

6. 🌬️ Crusoe Confirms It's Building Google's Armstrong County Campus on 531 MW of Wind

Crusoe announced Monday that it is the developer of Google's AI data center campus under construction in Armstrong County outside Amarillo. The campus connects directly to Serena's operating Goodnight 1 wind farm (265.5 MW) and Goodnight 2 (265.5 MW), which is under construction and which Crusoe says its project catalyzed. Surplus wind goes back to the grid.
The campus will use a closed-loop, non-evaporative liquid cooling system, which Crusoe says limits water use mainly to domestic needs like kitchens. Construction began in June 2025, and Crusoe put the daily on-site workforce at more than 5,500. That's below the roughly 7,500 Crusoe's Jeremy Bachrach cited at last week's Claude open house.

Today's Signal: Crusoe's release addresses the two concerns driving this year's Texas backlash, water and ratepayer costs. It gave no figure for the campus's own load, so the release doesn't say how much of its demand the 531 MW of wind would cover.

7. 🚀 SpaceXAI Reportedly Weighs a Bigger Texas Footprint

SpaceXAI, the SpaceX AI subsidiary, is considering expanding in Texas with at least one new large-scale data center as it pushes into the AI cloud market beyond its Memphis hub, Stocktwits reported, citing The Information and people familiar with the matter. No site, size or timeline was reported.

Today's Signal: Any new SpaceXAI campus would need permits that Abbott has frozen. Last week, SpaceX's Grimes County Terafab tested the freeze's limits by calling itself a chip plant rather than a data center.

No new TCEQ air-permit filings turned up in the eight tracked DFW counties, ERCOT posted no news releases, and no new behind-the-meter generation deals were announced for a named Texas project.

📍 Today's Watch List

Denton City Council's Oct. 13 vote on the data center code amendments, then its Oct. 27 moratorium hearing, with a possible pause starting in early December.
El Paso's "full hold harmless" counteroffer to EPE, and the PUC's final McCloud order, expected by Dec. 7.
League City's ordinance as it heads to a council vote, and whether other cities facing ETJ petitions like Uhland's respond.
The U.S. Senate's Ratepayer Protection Act vote, possibly as soon as Wednesday.
Talarico's U.S. Hispanic Business Council interview later this week, and whether Paxton's office finally answers Hood County's February moratorium question.
Which data-center water deals We the People Texas's public-records files turn up next.
Hut 8's Poolin sale hearing in bankruptcy court today, Sept. 29, and Westlake's Oct. 23 standing hearing on Circle T.
ERCOT's Oct. 12 deadline for data-center RFI responses and TCEQ's Oct. 19 compliance update to the governor.
ERCOT's December 10 audit report to the PUC. No material movement is expected before the December PUC meeting.