Dr. Joshua Rhodes did the math so the rest of Texas wouldn’t have to.
The headline figure in Texas energy right now is the size of ERCOT’s large-load queue — the electricity that data centers and other big industrial users say they want — which has climbed past 400 gigawatts. The grid’s all-time peak, set this summer, is about 91. Taken at face value, the queue implies a Texas grid more than four times its current size by the end of the decade.
Rhodes, a research scientist at the University of Texas at Austin who studies the ERCOT grid, wanted to know what it would physically take to build that.
“I actually ran the numbers,” he says. “You would have to take every single power plant developer in the entire country. They would have to come to Texas for five years and work twice as fast as they have in the past, just to get to that number.”
Then he adds the obvious: “I’m pretty sure folks in Florida and New York probably also want power plants too.”
His verdict is not subtle. “That number is just laughably impossible.”
It is also not the same thing as saying the boom isn’t real — and the distinction is the most useful thing Rhodes has to offer a Legislature preparing to write the rules for it.
The engineer of efficiency
Rhodes started out studying how buildings consume energy and, after finishing his Ph.D., shifted to how electricity is produced and moved — specifically on ERCOT, the grid that serves most of Texas. He is also a non-resident fellow at Columbia University’s Center on Global Energy Policy, a founding partner of the consulting firm IdeaSmiths, and host of the Energy Capital podcast. He says he once served as a commissioner advising Austin Energy, the city’s municipal utility.
The through line, he says, is a fascination with using things efficiently — and a conviction that electricity is where modern life is headed. Societies electrify as they advance, he argues, trading smoke and soot for a clean wire that delivers “the proverbial hot showers and cold beers,” along with light, motion and information.
“I’ve never heard anyone say the words ‘peak electricity’ with a straight face,” he says. People talk about peak oil because oil is finite. Electricity can be made from almost anything, and once it’s in the wires, it’s all the same.
Where the grid stands
Five years after Winter Storm Uri, Rhodes thinks the electric side of the system is in meaningfully better shape, largely because regulators now have far more visibility into how power plants perform.
His remaining worry sits upstream. Natural gas supplies about 45 percent of Texas electricity over a year, and more than 60 percent during winter stress events. During Uri, roughly 6,000 megawatts of gas plants reported they simply couldn’t get fuel. Texas runs a just-in-time gas system — production, processing, pipeline, power plant — and if any link fails, the plant at the end goes dark.
“I think we’ve done a lot of transparent work on making sure that power plants don’t freeze,” he says. “I don’t think we’ve done as good a job on making sure that the natural gas sector will be able to provide that power.” Perhaps that work has happened, he allows. “It’s just not been near as transparent as the electricity side.”
Demand, meanwhile, is climbing. ERCOT set a new peak of roughly 91 gigawatts on July 22, about 6 percent above the previous record of 85.5 gigawatts set in August 2023 — the first new summer peak in three years.
That jump sounds modest until Rhodes translates it. Five or six gigawatts is roughly five nuclear reactors’ worth of output, or about “two Austins worth of power,” all of which has to be generated, and moved, in real time.
What struck him about this summer wasn’t the record. It was what didn’t happen. The peak arrived without the thousands-of-dollars price spikes that once came with it, because Texas has built so much solar and battery storage in the last few years. The same sun that bakes buildings and drives up air conditioning load is turning solar panels, and batteries now carry that energy into the evening.
By Rhodes’s read of the data, batteries were on net charging during the record hour — so much generation was on the system that the peak was, in his word, “a nonevent.”
Wheat and chaff
So how did the queue reach 400 gigawatts?
Part of the answer is a law. In 2023, Rhodes says, the Legislature required ERCOT to account in its planning for any large load a developer so much as mentions to a transmission company — what’s called “unsigned” load. The intent was better foresight about where demand might appear. Then generative AI arrived, and the process was buried.
“There’s just this tsunami of large loads that came and just overwhelmed the system,” he says. Until then, there wasn’t really a queue at all — large loads came along rarely enough that a utility would study each one and hook it up. “That works when it’s one here, one there. But when it’s 50 here, 100 there, you just can’t study that in a reasonable way.”
ERCOT responded with what it calls Batch Zero, which studies large loads together, and Senate Bill 6 last session required developers to put up real money earlier to stay in line. Rhodes describes the goal as separating “the wheat from the chaff.”
“The 400 number is full of chaff,” he says. “We want to know what is actually wheat.”
His one defensible estimate borrows from the generator side, where historically 20 to 30 percent of projects that enter the interconnection queue make it to completion. Apply that to 400 gigawatts and “maybe you’re looking at 80-ish” — which is still, he stresses, a doubling of the grid in a few years. The estimate lands close to the roughly 100 gigawatts that utility executives have also floated.
That is why Rhodes calls the moment frothy, not fake. “Looks kind of feels a bit like a bubble,” he says of the 400 figure. “But even when bubbles pop, there’s froth there.”
He reaches for railroads. Economists describe certain innovations as general purpose technologies — railroads, electricity, the internet — and the pattern with them, he says, is that we overbuild first: parallel lines between the same pair of cities, many of which later failed. The technology still transformed the country. “There are going to be bankruptcies. There’s going to be consolidations,” he says. “But it doesn’t mean the technology is not going to be useful.”
The froth has a price tag behind it. A megawatt of data center capacity online is worth hundreds of thousands of dollars a year to its operator, and these facilities run to hundreds or thousands of megawatts. “If I can get a data center online before they do, I can make a lot of money.”
Who pays — and the overbuilding question
Rhodes’s view of overbuilding depends on which part of the grid you’re talking about.
Power plants in Texas are built in a competitive market, so the risk of a bad bet falls on shareholders, not ratepayers. If a data center boom leaves surplus generation behind, ordinary Texans could even benefit from the lower prices.
Wires are different. Transmission and distribution are regulated, and their costs are pooled and spread across every ratepayer — a system Rhodes says has served Texas exceptionally well precisely because it skips the cost-allocation fights that paralyze other regions. He points to the competitive renewable energy zone lines built a decade ago for roughly $7 billion. They’re full, he says, and saved on the order of $1 billion a year; estimates attributed to ERCOT run even higher.
“I generally have yet to see, in an economy like Texas, infrastructure go underutilized,” he says.
But a line purpose-built for a single customer is a different animal, and he thinks the pooled model needs a second look in that case. The irony is that many data center developers are eager to pay their own way. “Here’s buckets of money, let us go,” he paraphrases. “Thing is, we don’t actually have the structure that allows them to do that.”
There’s a subtler cost too. Turbine, transformer and wire supply chains are maxed out; Rhodes says a gas plant now costs two to three times what it did five years ago. That inflation hits utilities buying the same equipment, and it lingers. “Even if the prices go down in the future, they’ve still got a mortgage,” he says. “Just like if you buy a house at the top of the market.”
Noise, water, and trade-offs
On community concerns, Rhodes resists both dismissal and alarm. Some online opposition may be amplified by foreign actors, he says, but not all of it. “These are large industrial enterprises. They do consume resources. They consume energy, they consume water, they do make noise.”
Most of the loudest noise comes from backup generators during outages and routine test runs — “like mom’s Generac” kicking on every Saturday — and can be shielded the same way highway sound walls shield neighborhoods.
Water is a genuine trade-off rather than an unsolvable problem. Dry cooling uses very little water over time but consumes more electricity — and every megawatt diverted from chips to cooling is lost revenue. “It’s technologically possible to do,” he says, “but it’s not aligned with necessarily the economic interest of the data centers. Unless that’s the only way you’re going to get connected.”
That’s where he sees Gov. Greg Abbott’s August directive doing real work. Abbott ordered the PUC and ERCOT to audit data center projects in the queue — covering grid access, tax incentives and water use — and ERCOT paused Batch Zero pending the results, with the audit expected to wrap up around December. Rhodes calls it “step zero of the batch zero process,” a faster way to trim the queue. An earlier voluntary version, he says, mostly went unanswered.
“If I’m a data center company, I’m thinking I probably want to have the best answers to these questions,” he says — including treating oil-field produced water or brackish groundwater instead of competing for drinking supplies. “We have the technology. It just costs money. And money is the one thing these companies don’t seem to be short of right now.”
He also expects the state’s data center sales tax exemption — now costing more than $1 billion a year, and the subject of a bipartisan push to curb it — to shrink. “If you’ve got an industry coming in so fast with ‘shut up and take my money,’ there’s no reason to give tax breaks for that.”
The local property tax base is a different matter, and he thinks it’s underappreciated. Texas’s 1876 Constitution, written in reaction to Reconstruction, pushed taxing authority down to the local level. When a data center, a wind farm, a chip fab or an LNG terminal goes up, the improved property’s value stays largely in the community that hosts it.
Define the goalposts
Asked what he wants from the 90th Legislature, Rhodes keeps returning to one word: certainty.
“The only thing worse than bad policy is uncertain policy,” he says. SB 6 was “a great piece of work” that needs tweaks now that the state knows more, particularly in clarifying where the authority of the PUC, ERCOT and local governments begins and ends.
His firmest request is about what not to do. He hopes lawmakers won’t pick technologies — mandating, say, that half of new generation be natural gas. He points to 2022, when the price of natural gas tripled after Russia invaded Ukraine and electricity prices followed. Diversity, he argues, is a hedge.
“Define the goalposts, but don’t tell us how to get there,” he says. “Let the market do that.”
He has also changed his mind on one point, which he says plainly. He resisted treating large loads differently from any other customer, as he had with crypto miners. But roughly 90 percent of the queue is data centers, and the industry itself is asking to be told the rules.
“When you’ve got an industry that is saying, it’s okay to treat us differently, we just want to get connected — just tell us how you’ll treat us — I think we should go with that,” he says. “But make it temporary. Don’t ever put anything in stone forever.”
Some of the ideas for powering these facilities, he notes, have gotten exotic: orbital data centers, floating nuclear plants, old helicopter engines strung together for speed to power.
His host offered a diagnosis. If people are stringing together helicopter engines to run a data center, it’s probably a bubble.
“That’s what it feels like,” Rhodes says. “Smells like it, walks like a duck.”