Texas Freezes Permits, California Bills Ratepayers' Defense

And according to Utility Dive, California answered the same question from the other coast with seven new laws saying operators pay their own grid bill. Before that, in the headlines: North Carolina regulators tell Duke Energy no to a staggering gas turbine, plus Alibaba plots new cloud regions and Anthropic shops for direct control of power. Welcome back to Concrete Compute, your daily brief on the AI infrastructure buildout. It's Wednesday, September 23, 2026. Let's get into it. You are watching the two biggest buildout states change the rules on the same week.

Regulators in North Carolina just said no to new gas for uncertain AI load, according to Utility Dive reporting on a September 18 decision, and I have not independently confirmed this beyond that reporting, so treat this as what that outlet reports the order says. The North Carolina Utilities Commission denied Duke Energy's proposal to construct and operate a 255-MW natural gas-fueled simple cycle combustion turbine, basically a fast-start peaker plant, at its Smith Energy Complex in Richmond County, North Carolina. The price tag in the filing was $584 million, which staff testimony called staggering and very expensive. Now, why reject a plant the staff engineers said the system might need? The order said although Duke's modeling does currently project significant load growth, much of the growth appears to be based upon anticipated data center customer additions, and any such anticipated load growth is insufficiently reliable for the Commission to act at this point. So how do you protect your power bill when the load is still a maybe? The commission pointed to Duke's commitment to the White House Ratepayer Protection Pledge, a voluntary promise not to shift data center costs onto other customers, and said the record does not adequately establish how Duke intends to adhere to its commitments with regard to this facility. Duke said through a spokesperson it is disappointed and reviewing the order. One detail that stopped me cold, public staff engineer Dustin Metz testified Duke's capacity needs will require the development of some resources to be accelerated, and other resources to come online without any delays. Which means reliability is tight, even if this turbine wasn't the answer.

From North Carolina to overseas, Alibaba is going bigger abroad. According to Bloomberg, and this show has not independently confirmed it beyond that single report, Alibaba plans to add data centers in Europe and the Middle East. The gist is first cloud regions in Turkey, Finland and the Netherlands in the next 12 months. Now, think of a cloud region as a cluster of data centers in one area that sells computing to local customers, and these are announced regions, not operating capacity, not energized megawatts you can rent today. So why does this matter to you? It is more rival capacity chasing AI demand outside the US, which means more competition for chips, transformers, and turbine slots we already cannot get fast enough. What we do not have in today's reporting is a timeline for the full build or confirmed megawatts, so I am keeping this as an announced plan until filings or the company give us steel and contracts.

Staying with labs hunting for control, Anthropic is in early talks to lease power directly instead of just renting through a cloud, according to reporting from The Information, which this show has not independently confirmed. The gist is up to 1 GW, that is one gigawatt, direct lease from Stream, and the stage matters here, early talks and preliminary discussions, not a signed lease. Now, a direct lease means the AI lab contracts the building and the power itself rather than buying computing resold by someone else, which gives it more control over when machines turn on and what they cost. Why would a lab want that headache? My read is it is about certainty, you lock your own queue position and your own timeline instead of waiting behind someone else's customers. But with no timeline, no power counterparty confirmed in what we could fetch, and no funding terms in today's reporting, would you count this gigawatt yet? I would not, talks can fade, so file this as intent, not infrastructure.

Our first lead tonight, well today, is Texas hitting pause, and I am calling this thesis, Prove It Before You Build It. According to DCD, Texas Governor Greg Abbott has halted all new data center permits from the state's environmental agency until the state completes its large-scale audit of facilities seeking to connect to the ERCOT grid, that is the Texas grid operator that runs most of the state's power system. DCD reports the directive, issued to the Texas Commission on Environmental Quality, will effectively freeze all state-issued permits to data center developers, in DCD's exact wording. Now, for anyone new here, an interconnection queue is just the waiting line of projects asking to plug into the grid. Of that capacity, approximately 90 percent is attributed to data center load, according to DCD. DCD reports Abbott said in a statement, quote, Simply put, Texans must come first, end quote, adding data centers must pay their own way, protect our grid and water, and complete the audits. The audit was ordered by Governor Abbott last month and mandated the Public Utility Commission of Texas, the PUCT, and ERCOT to complete a comprehensive audit of all data center projects currently advancing through ERCOT's interconnection process, in the reporting's exact status language. What are they asking? Whether data centers are providing their own power or relying on the grid, bringing their own water or reusing water rather than relying on local communities, using measures to reduce impacts on neighbors, plus who actually owns and controls each project. Now, when does the freeze lift? Earlier this month, ERCOT said that it intends to complete the audit by December. That deadline is everything for you if you track time to power, transformers years out, turbine backlogs, substation permits, because a pause to December is a delay, a pause past December starts to strand capital. DCD cites a Bloomberg report saying the audit has put about 20 percent of the US data center pipeline at risk of delay, affecting almost 49.8GW of projects seeking a grid connection, with financial impact as much as $8 billion by the first quarter of 2027. Remember my discipline here, those are requested megawatts seeking connection, not contracted, not under construction, not energized, and delay-cost estimates are modeling, not a filed decision. Still, do you see the shift? From courting load to gating load until someone proves who pays for power and water.

Our second lead is California writing the receipt, and my thesis for this one is, If You Build Here, You Pay Here and You Show Your Work. According to Utility Dive, California Gov. Gavin Newsom on Monday signed seven bills aimed at giving communities more information about proposed data centers' energy, water, workforce and land use. California is home to 296 data centers, the third highest number in the US, according to Data Center Map cited in the piece. Newsom said in a statement, quote, Communities are left to deal with the consequences — higher electricity demand, grid constraints, water use, and pollution, end quote. Now, what do the seven laws actually do, according to Utility Dive? Utility Dive reports SB 1168 directs the California Public Utilities Commission, the agency that sets what utilities can charge, to examine data centers' energy use and ensure they pay for transmission and distribution upgrades and load increases. Utility Dive reports SB 886 and SB 887 require data centers to pay all infrastructure upgrade and generation costs, bear a larger share of wildfire mitigation and liability costs, and undergo environmental review. Utility Dive reports the bills will also ensure local communities have a say in data center projects, according to a news release from state Sen. Steve Padilla, the bills' sponsor, using the reporting's exact status language. So who eats the grid upgrade if your neighborhood gets a 100-megawatt neighbor? Utility Dive reports AB 1577 requires monthly reporting of data centers' energy consumption and efficiency metrics to the California Energy Commission and estimated energy usage to local agencies as part of permitting. Utility Dive reports AB 2383 incentivizes data centers to use onsite clean energy resources, basically power built at the site. Utility Dive reports AB 2469 and AB 2619 strengthen oversight of water use by requiring a water supply assessment and a water scarcity plan during permitting and a statewide water reporting requirement to obtain and renew business licenses. Assemblymember Diane Papan said, quote, Every drop counts, end quote, adding, quote, We cannot manage what we do not measure, end quote. Now, the honest caveat, laws signed is not rates designed, implementation at the utilities commission and environmental review criteria are still pending, so near-term impact is disclosure and a cost-allocation process, not built megawatts. And what did locals just do in Los Angeles County? The piece notes the planning director ordered a temporary ban on large-scale AI data centers in unincorporated areas, which tells you the pressure these bills are answering.

So what do Texas gating permits and California assigning costs actually share? Both states are answering who bears the cost of the AI buildout, Texas by freezing state environmental permits until grid and water impacts are audited, California by forcing disclosure and making operators pay their fair share of upgrades. My read is this strengthens the show's pro-buildout plus ratepayer-protection view, build fast, but the developer pays for dedicated grid and water risk, not your household. Time for the Hype Check. I give this pairing a 7 out of 10 on substance, in my opinion, because these are signed directives and statutes with real queue and rate impact, not MOUs, docked because Texas length is uncertain to December and California rate design is still unwritten. The question neither state has answered yet, will these audits and assessments actually publish load, water, and ownership data developers cannot game?

If today's episode helped you follow the megawatts to your money, follow the show wherever you listen so you get tomorrow's brief on time. This has been Concrete Compute, an AI-voiced podcast, created and built by a real human using today's cutting-edge technology. Nothing you heard on this show is financial advice. I'm Brian Lampert, and I'll catch you all tomorrow — take care!

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