El Paso Electric is seeking state approval to build a new natural gas-powered electric plant to support Meta Platform’s future data center needs – a move that is raising concerns among some city leaders though state regulators must review and approve the application before the facility can be built.
The utility is aiming to amend its certificate of convenience and necessity for a 366-megawatt natural gas generation facility. The estimated $473 million plant, if the application is approved by the Public Utility Commission of Texas, will be named the McCloud facility and will be used and paid for by Meta, according to El Paso Electric’s application to the utility commission.
The plant, expected to be operational by 2027 if approved, will be built on 31 acres in Northeast El Paso adjacent to the $1.5 billion data center. El Paso Electric officials said the plant is necessary to provide sufficient power for the data center’s accelerated development timeline. The Newman 6 power plant, which generates 228 megawatts using natural gas, cost $217 million to build. That plant started operating in 2023.
“The (McCloud) generation facility is dedicated solely to serving the data center, and the customer, Meta, is fully responsible for all associated costs,” El Paso Electric spokesman Jacob Reyes said in an emailed statement to El Paso Matters.
The utility’s filing states the McCloud power generation will be electrically connected with Meta’s, but will not be connected to the larger El Paso Electric transmission system during an initial “bridge period” of five years. During the bridge period, Meta will receive all of the power from the new facility and will be responsible for all of the costs. The utility still has to file a rate for approval designed to recover all associated costs of the facility from Meta, the filing states.
But some city representatives are concerned about what happens after the bridge period.
“I’m a little bit concerned that after those five years El Paso Electric would look to transition that (new plant) into their regular generation portfolio,” city Rep. Chris Canales told El Paso Matters. “I don’t think that they would look to recover any of that cost from customers, but I would much rather El Paso Electric not be constructing new gas generation that then becomes part of their normal portfolio.”
The City Council, which approved an incentive package to bring Meta to the city in 2023, on Jan. 7 filed a motion to intervene in the gas-powered electric plant application with the PUC. The City Council voted unanimously to file the intervention Jan. 6 after discussing it in executive session during the first meeting of the year. The city is also intervening in the utility’s effort to raise its rates for customers.
El Paso Electric has argued, in part, that it needs to collect about $85 million more annually from customers to pay off $1.55 billion in investments, including the $217 million to build the Newman 6 plant. State regulators will likely make a ruling on the rate increase in February.
The utility has also put in writing that any future rate increases it requests will have evidence that Meta is not being subsidized by regular ratepayers and that they are not getting discounted rates.
Canales, who voted in favor of the Meta deal in 2023, also voted in favor of the intervention for the new plant.
“Intervention doesn’t necessarily mean opposition – it just means you become a party in the filing,” Canales said. “It means you get access to a lot of the additional backup documentation of a filing to review – so that’s that’s the reason behind the council intervention.”
Mayor Renard Johnson, who only votes to break ties, said the intervention does not mean the city opposes the application.
“City Council routinely intervenes in EPE cases so we can understand the details, analyze impacts, and ensure transparency for El Paso ratepayers,” Johnson said in a statement to El Paso Matters.
Canales said he has concerns that Meta may be changing course from what they initially said about seeking to use renewable energy on-site, but understands if they need to use natural-gas powered generation to meet their immediate needs.
“That’s not what I think they (initially) said they were going to do – and so that’s concerning to me. It’s not a huge thing, but I want them to be committed to all of the things that they said they were going to do,” he said.
City Rep. Art Fierro, who voted in favor of the incentives in 2023 and voted in favor of the intervention, said he wants to ensure that both El Paso Electric and Meta stick to the financial arrangement for the power plant and that taxpayers do not have to foot the bill.
“This intervention is one of the ways that we want to make sure that everybody is sticking to what their commitment is,” Fierro said.
If after the five-year bridge period El Paso Electric decides it wants to add the new plant to its portfolio and interconnect it with the main system, it would have to follow the regulatory process and seek approval from the PUC, Reyes said. He said unless and until then, there is no cost to existing customers.
The move to build the McCloud facility comes after Meta opted to accelerate its development of the site. The Region 1 development phase will require 220 megawatts which the power company had already planned on supplying and had set rates for.
But with Meta wanting to move forward with Region 2, increasing capacity by way of a natural gas-powered plant was the quickest way for the utility to meet Meta’s load requirements by 2027, the PUC filing states.
Meta was initially planning to invest $800 million for the data center when the city entered its incentive agreement in 2023. In October 2025, Meta confirmed it would be scaling up the investment to $1.5 billion amid an industrywide boom of AI technology development – and not long after tech giants OpenAI and Oracle said they would build a controversial $165 billion data center campus in neighboring Doña Ana County.
Meta did not respond to El Paso Matters’ request for comment.
“Given EPE’s near-term system capacity constraints and to meet the timing requirements of this increased load, EPE and Wurldwide (Meta) explored options for quickly adding resources to EPE’s generation portfolio,” the PUC filing states.
Large-scale solar installations could have supplied the needed power, but would also have required thousands of acres of land adjacent to the data center that are not available. And while large-scale gas turbines could have supplied the power, it would take up to three years in lead time to execute the project, according to the filing.
The McCloud facility will have 813 modular gas generators, each producing peak capacity of 450 kilowatts. The facility will be built and operated by Enchanted Rock, a Houston-based provider of natural gas-powered, electrical resiliency microgrids. El Paso Electric will use cash from operations, equity and debt to initially pay for the construction of the facility, the filing shows.
City Rep. Lily Limón said she has reservations about Meta’s future water and power consumption and is concerned about the impact to residents. Limón was not serving on the City Council when the Meta deal was approved and voted in favor of the intervention.
“How are we going to supply them and to ensure that this doesn’t mean increases on the backs of local people that have nothing to do with these particular projects, and that is my biggest concern,” Limón said.
City Rep. Josh Acevedo said he’s concerned about utility consumption. He said El Paso doesn’t need more data centers.
“At the beginning they’re like, we don’t really need a lot of electricity or water, or we’re going to be okay – and then five to 10 years down the line, they need a ton of it,” Acevedo said, adding Meta presents a lot of challenges to a desert community.
Reyes said he is not surprised the city intervened in the PUC application for the new plant, but is “disappointed” since the city previously approved the economic incentive package to bring Meta to El Paso.
“We would expect the city to support necessary investments to meet the needs of this customer, especially those that will be recovered from the customer,” Reyes said. “Without consistent and aligned regional support for these generational opportunities for our community, we will be challenged to secure them moving forward.”
The post El Paso Electric proposes $473 million gas plant to power Meta data center operations appeared first on El Paso Matters.
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