Behind-the-Meter Power

On-site generation · ERCOT and SPP · Texas

Texas AI campuses, fabs and gigafactories are building their own power plants instead of waiting years in ERCOT's large-load queue. On-site gas is the workhorse, led by a 7.65 GW air permit at Amazon's GW Ranch in Pecos County.

Pecos County; 35-turbine gas plant on TCEQ air permit, plus 1.8 GW batteries and 750 MW solarAWS GW Ranch7.65 GW Chevron and Engine No. 1 gas plant with GE Vernova turbines; 20-year deal, target 2028Microsoft Project Kilby2.67 GW Sandow Lakes Energy; Siemens turbines on the former Alcoa site; target 2028Sandow Lakes gas plant1.2 GW Self-generation phase planned for 2029 at the former Southland Paper millAmp Z Lufkin1 GW About 2 GW of gas equipment secured; construction paused in Feb 2026Fermi Project Matador2 GW
Largest permit
7.65 GW gas
Main fuel
Natural gas
Law
SB 6 (2025)
Load threshold
75 MW
Permits
Paused at TCEQ
Sector
Energy

Overview

Behind-the-Meter Power Is Generation on the Customer's Side of the Meter

The meter marks where a project's wires meet the utility's. Substations, transmission lines and utility plants sit in front of the meter; the project's switchgear, batteries and generators sit behind it. Behind-the-meter (BTM) power is electricity generated on site and used directly, instead of drawn from the public grid.

Texas large loads turned to BTM because the grid queue cannot keep pace. ERCOT (the Electric Reliability Council of Texas) counted about 474.7 GW of large-load requests as of June 2026, 90% of them data centers and more than five times the grid's record peak. A plant built on site can energize in phases while a grid connection is still being studied.

Texas SB 6 (2025) set interconnection standards for any large load of 75 MW or more, whether it trains models, etches wafers or forms battery cells. It requires applicants to disclose on-site backup generation able to cover at least half of their demand, and lets ERCOT direct large loads with BTM backup to cut grid consumption during emergencies.

Profile
What it isGeneration on the customer's side of the meter
Main fuelsGas turbines, reciprocating engines, solar plus batteries, fuel cells
Texas lawSB 6, effective June 20, 2025
Large-load threshold75 MW
Queue (June 2026)About 474.7 GW, 90% data centers
State auditOrdered by Governor Abbott Aug 3, 2026
Permit pauseTCEQ data center permits paused Sept 21, 2026
Related lawPURA §39.169 net-metering approval

Configurations

Grid Ties Range From Islanded to Export-Only

BTM, off-grid, islanded, co-located and microgrid are often used as synonyms. They differ in how much of the grid the site still touches, and regulators treat them differently.

Under PURA §39.169, added by SB 6, a new large load needs PUCT (Public Utility Commission of Texas) approval before net-metering with a generator registered in ERCOT before Sept 1, 2025. The PUCT adopted the rule, 16 TAC §25.205, in March 2026.

  • Off-grid or islanded: no grid tie at all; the on-site plant is the only supply.
  • Co-located with new generation: a plant built for the campus, often with a thin grid tie for backup. GW Ranch and Project Kilby follow this model.
  • Co-located with existing generation: the load attaches to a plant that already served the grid, such as a nuclear station, which can pull capacity away from other customers.
  • Export-only: the plant stays grid-connected and sells power while the load draws from it, so the site still rides grid frequency.

Texas Projects

Gas Leads the Flagship Texas Campuses

Gas dominates because it is dispatchable and can be permitted and built at gigawatt scale faster than other firm sources. Batteries make solar work for a flat, around-the-clock load.

AWS GW Ranch in Pecos County carries a TCEQ air permit for up to 7.65 GW of gas turbines developed by Pacifico Energy, with plans for 1.8 GW of batteries and 750 MW of solar; critics estimate its emissions at about 33 million tons of CO2 a year. Project Kilby is a 2.67 GW Chevron and Engine No. 1 gas plant in West Texas under a 20-year deal with Microsoft, targeting 2028 pending Chevron's final investment decision.

Google and Intersect's Meitner Energy Center near Pampa in Gray County pairs a data center with co-located wind, solar and batteries, with on-site gas for the rest. Crusoe's Stargate Abilene campus combines a grid connection with on-site gas turbines. Fermi America's Project Matador near Amarillo holds a gas air permit and a Westinghouse AP1000 plan, but paused construction in February 2026 without a tenant.

Fabs and gigafactories need the same thing for a different reason: a voltage sag can scrap a wafer lot or halt cell formation. Dedicated generation is part of the planning for Terafab at Gibbons Creek, Samsung Taylor and Giga Texas.

Constraints

Air Permits Are Now the Gate for Texas BTM Projects

On-site gas avoids the grid queue but not the air permit. On Sept 21, 2026 Governor Abbott ordered TCEQ (the Texas Commission on Environmental Quality) to pause all data center air and water permits, including on-site power, until ERCOT's audit finishes, expected in mid-December 2026. New BTM plants for data centers cannot get permits until then; projects already permitted, such as GW Ranch, are unaffected by the pause itself.

On-site plants also have to be synchronized and protected to coexist with any grid tie, and gigawatt gas fleets draw scrutiny for emissions and water. Abbott's 2027 legislative agenda targets data center financial incentives.

Record

Dataset Record

Sources
POWER Magazine, DLA Piper, DatacenterDynamics, Cleanview, Energy Capital HTX, NewsChannel 10 Amarillo, Texas Legislature (SB 6), PUCT, ERCOT, Office of the Governor
Last verified
October 2026