Why Texas Data Centers Must Build Their Own Power: Podcast Deep Dive

The latest episode of The Building Texas Show, titled "Why Texas Data Centers Must Build Their Own Power," hosted by Justin McKenzie, brings listeners inside one of the most urgent infrastructure debates in the state. Recorded in San Antonio and published August 6, 2026, the conversation features Nash Whitney of Stella Power Company breaking down behind-the-meter generation at a moment when ERCOT reports more than 300,000 megawatts in its interconnection queue by 2032, roughly four times the grid's current 85-gigawatt peak load. The episode arrives as Medina County residents brace for six new data centers.

McKenzie and Whitney walk through the technical, economic, and policy layers shaping large-load power in Texas. Topics covered include behind-the-meter power and the difference between power and energy, kilowatts and kilowatt-hours; Texas Senate Bill 6 and Governor Abbott's newly expanded large-load rules covering both power and water; hyperscalers such as Microsoft, Amazon, Meta and Google, and the strata of tenants beneath them; Winter Storm Uri, ERCOT price signals, and on-site generation as a hedge against real-time spikes; and diesel versus natural gas versus renewables, and why Caterpillar remains sold out of backup units.

Whitney frames the scale problem in blunt terms. "Behind-the-meter power is ultimately going to be one of the only viable solutions to do that at the scale that everyone is asking it to be done," he tells McKenzie. He describes utilities across the country now demanding non-refundable deposits in the hundreds of millions of dollars for substation buildouts, with no committed schedule, pushing hyperscalers toward on-site generation. McKenzie, drawing on his utility background at Bandera, recalls the crypto boom: "We wouldn't touch it unless they prepaid for everything." The message is consistent: large loads must carry their own cost.

The discussion goes deep on Stella's model. The company develops, designs, owns and operates natural gas power plants long-term, backed by Arroyo Energy Investment Partners in Spring, Texas, with sister company Mesa manufacturing generators in Loveland, Cheyenne, Wyoming, and San Antonio. Whitney invokes Milton Friedman and Thomas Sowell to explain how ERCOT's energy-only market sends price signals for investment, and he argues reshoring manufacturers face the same constrained grid as data centers. On fuels, he credits diesel's BTU density for backup roles but points to Texas natural gas from the Marcellus and Bakken as the scalable answer. His summer tip for Texans: download the ERCOT app and be a good grid citizen.

About The Building Texas Show: The Building Texas Show, hosted by Justin McKenzie, spotlights the entrepreneurs, operators, and industry leaders shaping the Lone Star State's economy, from energy and infrastructure to small business and community. Each week the show delivers candid, deeply reported conversations with the builders behind Texas growth. New episodes release weekly across YouTube, Facebook, Instagram, and LinkedIn. This episode is available now wherever podcasts are heard.