All right. Well, thank you everyone for sticking around. I know we've had a few excellent panels already, and we're going to try and end on a high here. So, as you heard, my name is Ashlin Carlson. We've heard very brief introductions to Ellie and Jason, and we only have 35 minutes, which is not a lot of time for quite a big topic. Just by way of quick show of hands, who has used some kind of AI platform here this morning? That's quite a few people now. Keep your hands up if at any point during that time you thought about where the electricity to power that AI came from. Okay, there's a gap there and it's that gap between using it and powering it that we want to talk about here today. So just wanted to start with a little bit of history and history about Houston. So in the 1900s there was a big hurricane that came through and from my understanding it kind of knocked out the port of Galveston. And when the city was thinking, okay, what are we going to do here? You know, how are we going to rebuild? The ship channel was invested in and evolved and obviously that shifted the center of energy and trade gravity to Houston. And so now we fast forward to today and we're thinking about this AI and data center wave that's coming at us and much like the generation that was struck by that hurricane we're thinking, what's the equivalent of build the ship channel that we need to think about in order to set ourselves up for success. So Jason, Ellie, what is that structural shift that we want to see here in our city of Houston?
So for us on the wire side, it's building the electron superhighways to make sure that we have enough electricity to continue to fuel Houston's growth. We have plenty capacity here to enable Houston's growth, whether it's data centers, advanced manufacturing through about 2030, but when we get beyond 2030, we need to move massive amounts of electricity across all of Texas. And so, the state of Texas has passed a law enabling construction of a higher voltage standard to move the most amount of electrons to where they're needed here in Houston. So it's several thousand miles of what I would call electron superhighways.
Yeah. Ellie, what would you say?
Yeah. Well, if I recall the history right, I think that it bypassed Galveston and the ship channel was built. So I think there was a lot of foresight about where does it make the most sense to build out that specific ship channel. I think the same thing is happening now with data centers where I think in the last 12 to 24 months the data centers have knocked on our door saying here's where we want to locate and now when you get through the supply chain constraints and all the things that you have to consider we're flipping that conversation to where can we enable the speed to market where is it low cost because you're able to offset, you know, if you don't need a transmission upgrade if you can put a generation in there or vice versa and be able to create what I call hubs, hubs where you have the land availability you have the right power infrastructure to enable it. Water is important as well and it's not I guess not a coincidence either that we're regulated by a commission that oversees both the power and the water as well so it's having that holistic integrated view is important. Energy is vertically integrated. So we pride on the fact of being able to provide one solution across the value chain and I think more and more that's becoming the differentiator and being able to power data centers with speed.
Well, let's talk about some numbers and Jason I would love to just straight up ask you, how much power does Houston and Southeast Texas consume today? And if we had to double it, how are we going to go about achieving that?
Yeah. So, if you think about the greater Houston region today, it's about a 22 gigawatt peak demand. But what I think is important about that peak demand in Houston here is we were connecting large loads before they became popular. So before people started to talk about data centers, they were talking about oil refineries, chemical and processing facilities, right? And I think it's all along the Gulf Coast, not just here in Houston, but we have a history in this Gulf Coast region of connecting very large loads. So we built our system to have ample capacity to enable the growth. So 22 gigawatt peak today, but under construction in our service territory here is about 14 gigawatts of data centers as we speak. Those 14 gigawatts will come online over the next four years. So it's an extraordinary amount of incremental demand on the system. The system has the capacity for it. Texas has the generation. You know, over the last 5 years in Texas alone, we have installed more generation than the peak demand of all of California, the system that they've built over a hundred years. So in Texas, we have capacity. We have the history of moving quickly. We can build things at scale. And that's why I continue to be confident in our ability to meet this rising demand.
I would say very similarly for Texas, we're about five gigs for all of Entergy. We serve parts of Louisiana, Arkansas, Mississippi, and then southeast Texas, we're at 25 gigs and growing. We have history of serving large industrials like Jason said. And right now for Texas about 40% of those are large industrial. There's some large industrials that once they're done with their final phases, they're going to be as big as a hyperscale data center. So, the Gulf has a lot of experience in being able to serve these large loads, which is different than other utility providers in other parts of the country. And I think that having that knowledge and being able to scale is something that's important. In Louisiana, we're serving Meta's largest data center announced to date. It's more than five gigs. That continues to expand. Same thing with AWS in Mississippi, Google in Arkansas. In our part of town, southeast Texas, the northern part of the greater Houston wrapping around all the way east of the Louisiana border. We've seen some activity on data centers. And there's a lot of chatter happening. So, we're seeing some folks knocking on our door now. So, there are a lot of leads there and a lot of discussions taking place. But we're building right now just in Texas, three natural gas combined cycle power plants. One that in two weeks from now, it's the largest in the southeast of the US that's coming online at 2,150 megawatts and across all of Entergy, we're building over 20 gigawatts of power plants under construction right now and over 1,000 miles of high voltage transmission. So there's talk about scale, talk about speed. You know, this has only been a few years and we're already well underway under the construction as I assume CenterPoint is as well with the high voltage lines.
So you're keeping busy. Would love to double click on maybe the example that you just mentioned around the relationship with Meta and what you're building in Louisiana. I mean, that's a really cool partnership. Can you share a little bit more about how that came about? What you're doing together?
Yeah, and what Meta is doing in Louisiana is transforming the community. There's examples you may have seen where you have Richland Parish and teachers there that are, beyond their normal salaries and compensation, they're getting $50,000 bonuses. It is just when you think about the sales tax revenue that's going into that parish. I saw a report earlier today that the 10 surrounding parishes around the Richland Parish where the Meta data center is coming in, their tax revenue has also increased anywhere between 5 and 30%. And in Richland Parish, what they've had in sales tax revenue halfway through 2026 overshadowed what they got in all of 2024. So when we think about data centers there's a lot of negativity right in the media and the press and what we're seeing firsthand is how much it is creating economic development. It is an engine for economic vitality and these specific examples, data centers need a little help when it comes to stakeholder engagement. I think they build a lot of neat stuff. I think utilities have learned the hard way and we are part of the community so we have those relationships and I think the partnership is what's going to make it, you know, powerful, no pun intended, is how do you work together? We can help with the stakeholder engagement. They're obviously bringing the technology and the economic development. We structure it in a way that benefits the community.
I just want to echo some of these points around responsible development. It is truly transformative for the communities we have the privilege to serve. Ellie was highlighting a couple of the examples as you're in the middle of construction, but even as you look to sort of maybe a first phase coming online, we're working with one of the smaller counties that we have the privilege to serve. And as we think about the first phase of the data center alone, when it's fully online, it'll be a 10x increase in that county's annual revenues. Completely transformative from all of the local county services, education, fire, police, roads, and so, these are really, really transformative investments for our community that we need to do a better job collectively as an industry telling that story and building responsibly in these communities.
Yeah, I think that piece around building trust with the community is a really important part of this story. So, thank you for highlighting that. I do want to talk about a number that I've heard been thrown around in many conversations. And that is ERCOT's all-time peak. Do you know the number off the top of your head?
Yeah, around about there. And if you add up all of the data center requests sitting in the interconnection queue right now, my understanding is that filings could theoretically need 3x, 4x that amount. Does anyone know what would the peak be if all the requests in the queue got built in Texas right now? You want to shout out a number anyone? No. 368 gigs. It's not a small number. How, I guess question, how much data center demand is actually online and under construction? Ellie, you mentioned a number earlier. And how much on your grid? Maybe you could talk a little bit more about that, Jason.
Yeah. So, we have just under about a gigawatt today of data center demand here in the greater Houston region. And remember that's in a 22 gigawatt peak demand. We have 14 under construction. You know, I've been on record on these numbers. The state's doing everything they can to rationalize and make sure that we're advancing projects that are viable and that are real. I still think when you look at that 360 gigawatt peak that's probably still overstated as we work through this process. I think something that's more practical is probably about a 50% increase give or take in peak demand by the end of the decade. That seems about reasonable when you look at sort of the implied power needs from chips that are being manufactured. What a reasonable share would be coming to Texas, because these chips will go all over the US, if not all over the world, right? I think we're looking at probably more likely around a 50-ish percent peak increase in peak demand by the end of the decade if I had to guess.
Yeah, Ellie, what's your over/under on that?
I'll follow Jason's lead on this one. I will say that for the rest of the Gulf States, one of the things that we've been very careful about is who we partner with. We get a bunch of data center leads, but we want to make sure we're partnering with the ones that have the right mindset in terms of protecting existing customers. We have what we call the fair share plus, which is any data center that we're going to serve that they have to meet the requirements of paying their fair share for the incremental investments that we have to make to serve them. And the plus part is if they've now become an energy customer, it's not just what we had to build for them to serve them, but now they're picking up storm cost, resiliency cost, all these other things that the rest of the customer base is having to pick up as well. So they have skin in the game and so it has to be the right data center. They have to have the right size balance sheet to be able to afford the investments and be able to pay for long lead time equipment so that we can get in the queue earlier and as we vet these processes. So it is a way to vet and kind of filter out those contenders with the pretenders as I would call them. So that we're seriously working with the ones that are actually going to bring the community benefits that are going to protect existing customers and then obviously we're going to take the measured risk to actually build all this huge amount of infrastructure that we're not just going to be sitting and having our customers that are there paying for it if they don't come.
Actually, if I could add from the Texas angle as well, there's a lot of misinformation. Are data centers driving utility rates up? And in fact, they help drive utility rates down. The state of Texas passed a law that basically codified effectively what Ellie announced, which was data centers have to pay all of the direct infrastructure costs to upgrade the system so that they can draw power from it. Plus what they do is they share in the other cost on the system. So when we think about the data centers that we are connecting to the grid over the next four years, it will save our current customers about $5 billion over the next 10 years by shifting costs to those data centers. So not only are they paying their direct costs, they're absorbing about another $5 billion that otherwise would have been spread to our existing customers today.
We have an equivalent number which is 7 billion in savings. These are real savings to existing customers because the data centers are coming in in those specific three states that I mentioned earlier.
Is that bill that you're referencing? Is that the Senate Bill Six?
Senate Bill Six. That's right.
Yeah. I would love to touch on that a little bit more and understand what the pressure is like to have that big red button that you can push in the event that you need to curtail. Can you talk a little bit about what it feels like to have that button at your disposal and maybe a little bit more about how it came about?
Yeah, look, I think there's a lot of fear in terms of the impact of these larger power customers on the system and what that would be. But what I would tell you is each of these customers have become exponentially more flexible over the last 18 months. You know the old adage, necessity is the mother of all invention, right? 18 to 24 months or so ago data centers really didn't want to be flexible. At that point they were finding spots where they could connect around the US grid. Those spots became more difficult to find and as a result the data center industry really leaned into flexibility and today I think they're fully comfortable with this idea of a kill switch, this big red button to shut down their power demand in times of need because for 96, 98% of the year, this is an opportunity to tap cheap power quickly and they would be happy to cede some of that flexibility in those moments where the grid is at its tightest because it's such a small percentage of the year. So, we've seen no push back from customers lately on this. And in fact, we also see it from our industrial customers, right? We had the horrific issue with Winter Storm Uri about five years ago and since then, even though the industrial customer base has become much more price sensitive. So when we had Winter Storm Heather back this year, we had about 7 gigawatts of industrial demand reduction that allowed the system to ride through that storm without a problem. So I think all of these customers, whether they're traditional industrials or new hyperscalers, are much more accommodating of flexing their load based on sort of the amount of electricity that's available on the grid.
Ellie, am I right in thinking you don't have access to that kind of a big red button in MISO?
