As Meta Platform begins construction on its new multi-billion dollar El Paso data center, El Paso Electric is working to rapidly build a power plant for the facility that ratepayers will pay for within a few years.
Filings with the Public Utility Commission of Texas show the utility plans to shift the power plant’s cost to all customers after an initial one- to five-year “bridge” period where Meta would pay all of El Paso Electric’s cost to deliver power to its data center. The nearly $500 million, 366-megawatt facility would rely on 813 small gas-fired generators that don’t require water but would emit pollutants such as carbon monoxide and nitrogen oxides.
Meta executives on Thursday unveiled a massive expansion of its planned data center in Northeast – boosting its investment from $1.5 billion to $10 billion. The company also announced increased investments in the community, including job training grants and bill payment assistance.
Executives said over 4,000 workers will help construct the data center, and Meta plans to hire 300 full-time employees to operate the facility. The tax break agreement between the city and Meta requires the company to hire only 50 workers.
In promoting the increased investments, Meta said it’s also working to offset the data center’s impacts, citing investments in renewable energy and water projects.
Still, the public backlash to Meta’s data center – as well as opposition to the separate Project Jupiter data center in Doña Ana County, New Mexico – has grown so large that the city organized numerous meetings through April 8 to get community feedback about whether the city should seek to attract more data centers.
Most opponents are concerned about the facility’s water usage, air pollution from an on-site power plant, and the tax breaks the city and county granted to Meta. The incentives include an 80% break on city and county property taxes for decades and $12.5 million the city gave to repair the road infrastructure immediately around the data center.
El Paso Water estimates the data center will consume an average of 400,000 gallons of water per day; the city-owned utility currently pumps an average of about 110 million gallons of water to customers every day.
“I don’t want data centers for generative AI here in El Paso. They’re not the right fit for our community,” District 8 city Rep. Chris Canales said in a video posted to social media on Tuesday. Canales voted in favor of the data center economic development incentives during his first year in office in late 2023.
“I can say clearly, if I were voting on this today, I wouldn’t support it,” said Canales, who’s up for reelection in November. “I wish we had voted differently in 2023, and I’m sorry for my role in it.”
Meta commitments in El Paso
In addition to upping spending and hiring targets, Meta said it will create a $500,000 grant program for the El Paso Independent School District to fund hands-on job training programs. The company also said it will donate $25,000 to El Paso Water to fund bill assistance for ratepayers.
On the water front, the company said it will pay for projects with the nonprofit DigDeep to provide water and sewer service to 100 El Paso homes for the first time.
Brad Davis, director of data center community and economic development, said Meta is working to fund more water-efficient irrigation systems for local farmers so they use less water than they do currently.
Meta has said its water-related projects will conserve twice as much water in El Paso as the data center consumes.
Davis said Meta is also planning to develop renewable energy projects in the region to offset the emissions from the data center’s nearby power plant.
“Data centers and this infrastructure is critical to everything we do on the internet. You think of the cloud, those are data centers,” Davis said. “When you think about the tangible aspects of the data centers themselves, it’s a very large building filled with many computer servers that are storing, processing, and transmitting data all over the world.”
“And when you have a global platform like ours and intentions of deploying that AI everywhere, it’s going to require very large amounts of infrastructure similar to what we’re talking about here in El Paso,” he added.
He declined to disclose the salaries for workers at the data center, but he said they would be “well-paid.”
Where will the data center’s electricity come from?
El Paso Electric in December asked the PUC to allow the utility to build the 366-megawatt, natural gas-fired power station to provide electricity to the AI data center in Northeast. For perspective, the utility currently has about 2,800 megawatts of total generation capacity currently.
El Paso Electric wants to work with a Houston-based company called Enchanted Rock, which produces small, gas-fired generators that it sells to customers such as the grocery store chain H-E-B. The chain uses them as a backup for stores if the power grid goes out.
El Paso Electric wants to use a noncompetitive procurement to contract with Enchanted Rock and stack 813 modular generators together to power Meta’s data center. The generators are air-cooled and don’t require water for cooling.
The proposed power plant – a collection of small generators – would be far different than the big solar fields or the centralized nuclear and gas-fired power stations on which El Paso Electric now relies.
The $500 million facility would be the biggest power generation facility Enchanted Rock has built – and more than twice the $217 million El Paso Electric spent to build the 228-megawatt Newman 6 unit.
El Paso Electric said it has never worked with the company before this project. Typically, the utility conducts lengthy, competitive procurement processes to find the cheapest sources of electricity to develop.
El Paso Electric said it chose the Enchanted Rock configuration because that’s what Meta preferred and because no other resource options could meet the load requirements in 2027 and be constructed colocated with the data center.
“The Project was developed in response to requests by (Meta) to accelerate expansion of its original load requirements by 2027,” El Paso Electric wrote in filings.
Despite the utility’s executives claiming Meta’s data center will not impact customer rates, El Paso Electric told the PUC that it plans to eventually charge customers the cost of the power plant it’s building to serve Meta.
The utility said Meta will pay the full cost of what it’s calling the McCloud Generation Facility for a “bridge period” between one to five years. After that, El Paso Electric “will incorporate the cost of the facility into its total jurisdictional cost of service and retail rates,” the utility said.
“The cost of McCloud Generation will be borne entirely by (Meta) during the bridge period,” James Schichtl, a vice president with El Paso Electric, told the PUC. “There will be no rate impact on any customer other than (Meta) during the bridge period, and any subsequent change to rates designed to recover costs for McCloud Generation would require PUCT approval.”
El Paso Electric said it expects the Enchanted Rock facility would produce one megawatt-hour of electricity at an average cost of $41.70. The gas-fired Newman 6 unit, by comparison, produces one megawatt-hour at a cost of $22.54 on average, while the utility’s power plants in Far East El Paso County and in Sunland Park, New Mexico, produce one megawatt-hour at a price of $26.75, according to filings El Paso Electric submitted to the PUC.
According to figures published by Enchanted Rock, the generators planned for the data center’s power plant would emit annually about 117 metric tons of nitrogen oxides, which produce ground-level ozone, trigger asthma and cause respiratory problems. El Paso Electric’s proposed generating facility would increase the utility’s NOx emissions by about 5% compared with the level it reported in 2024.
Enchanted Rock declined to comment.
The power plant dedicated to Meta’s data center would also produce around 2,700 metric tons of carbon monoxide annually, as well as 42 metric tons of particulate matter, the small air particles that can cause a wide range of health problems, according to the emissions data published by Enchanted Rock and filings El Paso Electric submitted to the PUC.
Air quality data show carbon monoxide pollution in El Paso is well below federal air standards, but particulate matter pollution here far exceeds safe levels established by the Environmental Protection Agency.
The Public Utility Commission of Texas in the months ahead will decide whether to approve the plant’s construction.
“It is comical to think that Meta cares what our water looks like in 10 years, to care what utility bills look like in 10 years, that they care about the people who are going to have to live next to this gas plant,” said Matthew Rodriguez, an organizer with the local advocacy group Amanecer People’s Project. “This is completely irresponsible.”
Economic development, jobs
To supporters of Meta’s investment in El Paso, the jobs at the data center are a win but only part of the picture. That’s because other companies could come to El Paso to do business with Meta, or because Meta’s project signals El Paso is pro-business, said Jon Barela, CEO of the Borderplex Alliance.
“These jobs are worth it. They’re high-paying and transformational in a great way for our region,” Barela said during a panel discussion Thursday at the Plaza Hotel in Downtown. “We have to get on the train now. The AI supply chain is a golden opportunity for us to move our wages forward.”
In general, El Paso Electric is incentivized to welcome data centers such as Meta’s into its service territory. For one, data centers that run constantly are customers that produce steady revenue and cash flow compared with residential customers.
El Paso Electric also wants to build new infrastructure that serves the data center, because it can earn a profit margin on that capital investment; the utility said that the McCloud facility would produce a profit of $32.3 million for El Paso Electric over the plant’s life.
Utilities have large, fixed costs to maintain infrastructure – such as poles, wires and power plants – that they recover by selling customers electricity. So, selling more energy to Meta means the utility can spread those fixed costs out more so that residential customers bear a smaller portion of the utility’s fixed costs. However, El Paso Electric has not publicly quantified the impact of Meta’s arrival on residential customers’ bills.
Meta’s data center is “likely to benefit all of EPE’s Texas retail customers,” Schichtl said. “This is because the fixed costs in EPE’s system related to existing generation and transmission, as well as other costs, will be spread over significantly more energy than in the current system once the Data Center is fully operational.”
Some community organizers have called on the city to cancel the economic development agreement with Meta, and for El Paso Water to cancel its water supply agreement for the data center. However, Meta has already broken ground at the site.
“We have 1,500 construction workers on site today. We are getting ready to pour foundations,” said Holli Davies, a community development manager with Meta. “We are moving forward.”
Kelly Tomblin, El Paso Electric’s chief executive, said projects such as Meta’s will help drive job growth and increase wages in El Paso long-term. She said the data center is part of a bigger vision of economic development, and said for El Pasoans to reject a “just say no” mindset toward corporate investment.
“We have a bigger vision for this region. We know that where we’re performing right now is not our full potential,” Tomblin said Thursday during the panel discussion Downtown. “So, when we talk about data centers, I just always want to put it into context. It’s part of a bigger vision for growing this community and growing our region and for economic prosperity. And Meta will add to that.”
Data Center Community Meetings
The city of El Paso is hosting open-house style community meetings to gather feedback on a proposed policy guide for data centers that might want to operate in El Paso in the future. The last three meetings, scheduled from 5:30 to 7 p.m., are as follows:
- Monday, March 30: The Beast Urban Recreation Center, 13501 Jason Crandall Dr.
- Thursday, April 2: Chamizal Community Center, 2119 Cypress Ave.
- Wednesday, April 8: Wayne Thornton Community Center, 3134 Jefferson Ave.
Information: City of El Paso Data Center Resource Hub
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