Three projects, three counties, one phenomenon
The Permian Basin is best known for oil. Over the last twelve months it has also become the most active behind-the-meter AI infrastructure corridor in the United States.
Three distinct data-center projects have been announced or approved in three adjacent counties straddling the Texas / New Mexico border, with combined nameplate capacity of 10.8 GW. Every one of them is designed to be behind-the-meter -- meaning the data centers will not draw from the public grid; each will be paired with its own dedicated generation. Collectively the three sites would represent more new firm capacity than the entire current peak electricity demand of New Mexico, and all of it carved out of the ERCOT and SPP balancing areas.
The three projects are:
Microsoft Pecos Texas Data Center / Chevron Energy Forge One -- Reeves Co., TX. 2.5 GW dedicated gas plant fueled by oil-extraction byproduct gas, paired with a Microsoft-leased AI data center on a parcel originally intended for the Oracle / Stargate joint venture. $7 billion total investment. Engine No. 1 is a co-investor. Chevron has filed a JETI tax-abatement application with the Texas Comptroller (decision expected next 60-90 days) seeking ~$227 million in foregone school-district property taxes over 10 years; the state would reimburse the school district.
Zenith Volts Chaves County Data Center -- Chaves Co., NM. 1.3 GW total on an 8,400-acre site, 20 miles south of Roswell. Power mix is unusual: on-site solar, a 250-acre / 18 GWh battery system, natural-gas turbines, and geothermal cooling. The developer (Wyoming-based Zenith Volts Corp.) is marketing the project as net-zero-carbon and explicitly NOT connected to the public grid -- behind-the-meter from the first watt. $11.7 billion investment. 900 construction / 140 permanent jobs. Approved by Chaves County commissioners in August 2025 with NO tax abatements offered by the county. Operational target: late 2027.
New Era Energy 7 GW Lea County AI Data Center Hub -- Lea Co., NM, near Caprock. 7 GW total: 2 GW natural-gas plus 5+ GW nuclear via a modular reactor (vendor unannounced; CEO E. Will Gray II told Hobbs News-Sun the company is "in the final stages of technology selection"). 3,500-acre site under land-option agreement (not purchased). $20+ billion implied total project. Initial power target: 2028. New Era Energy & Digital (NASDAQ: NUAI) is a small-cap public company whose existing footprint is a 250 MW joint venture in the Texas Permian Basin; the New Era project is their first wholly-owned development.
Why the Permian, why behind-the-meter
Several factors converge to make the Permian Basin uniquely attractive for behind-the-meter AI infrastructure.
Land. Sparsely populated, large flat parcels available cheap. Lea County (population ~70,000 across 4,400 square miles) has plenty of room for a 3,500-acre campus. Chaves County is similar. The lack of nearby residential density means siting fights are smaller than they would be in Northern Virginia or the Dallas suburbs.
Gas. The Permian is the largest oil-and-gas-producing basin in the world. Associated gas (the natural gas that comes out of oil wells as a byproduct) is often flared at the wellhead because there isn't enough pipeline capacity to move it. Building a 2.5 GW gas plant that consumes flare gas turns an environmental liability into a power source. Chevron's Energy Forge One project is the cleanest example -- 7 GE Vernova 7HA turbines, fueled by Permian flare gas, paired one-for-one with a Microsoft data center.
Workforce. Oil-and-gas industry workers transfer cleanly to industrial-scale construction and operations. The skilled-labor pipeline that already serves the basin's drilling and processing infrastructure also serves data-center buildouts. Construction-phase jobs scale into the hundreds-to-low-thousands per site without importing labor.
Politics. Both states are pro-development. Texas has the JETI tax-abatement program (the Comptroller approved its first-ever data-center-power-plant abatement when Chevron applied). New Mexico's Lea and Chaves counties have approved their first two large data centers in eight months. Chaves County approved Zenith Volts with NO tax abatements -- a no-incentive approval -- which suggests the developers don't even need state-level subsidies to make the economics work at this site.
Grid bypass. ERCOT and SPP interconnection queues are running multi-year backlogs for new generation requests. Behind-the-meter design avoids the queue entirely. It also avoids the public utility commission rate-case process that would otherwise pass infrastructure costs to residential ratepayers; it avoids participation in the capacity market; it avoids renewable portfolio standard compliance; and it avoids the integrated-resource-plan public-comment process. The trade-off: emissions and water impact land entirely on the local airshed and aquifer, with no broader grid benefit and no rate-impact analysis required.
The regulatory escape velocity is the structural reason behind-the-meter is spreading. Building the same 7 GW of nuclear-plus-gas inside the regulated MISO or PJM service territory would require five years of PUC and FERC filings and would face years of organized public opposition. Building it behind the meter in Lea County requires a land-option agreement and county zoning approval -- the rest is private.
Lea County's "regulations" -- and what they actually do
On February 26, 2026, the Lea County Commission unanimously passed a set of data-center regulations specifically in response to the New Era announcement three months earlier. The Hobbs News-Sun covered the vote.
The headline regulations:
1. Data centers must use closed-loop or alternative cooling systems to protect potable water. 2. Facilities must either build behind-the-meter power OR negotiate directly with utility providers to prevent residential rate increases. 3. Projects seeking Industrial Revenue Bond or Payment-in-Lieu-of-Taxes incentives must distribute payouts to all county school and hospital districts.
Look carefully at what these regulations do NOT do.
They do not block any project. They do not set megawatt or land-area caps. They do not require water-impact studies before approval. They do not require renewable-portfolio compliance. They do not require public-comment periods on individual projects. They do not require disclosure of the end-customer behind any developer.
What the regulations DO is codify what New Era was already planning. New Era's Lea County project was always going to be behind-the-meter (that is the point of the design). The cooling system was always going to be closed-loop (Lea County water resources don't support open-loop at gigawatt scale). The IRB / PILT distribution rule has the most teeth -- it forces incentive payouts to be shared with hospital districts -- but New Era has not so far indicated it intends to apply for IRBs or PILT.
County Manager Corey Needham told the Hobbs News-Sun the framework is a first pass and that 8-10 more regulation revisions are expected. Commissioner Dee Ann Kimbro called the package "a great deal." Whether the next 8-10 revisions add teeth or further codify developer preferences will determine whether Lea County is regulating data centers or smoothing their path.
It is worth noting that Chaves County, the next county west, approved Zenith Volts in August 2025 with no data-center-specific regulations at all. The Permian Basin counties are in different stages of the same conversation -- but the destination so far is permissive.
Cross-reference: this story sits on top of our coal-proximity finding
Yesterday we published a story showing that 19 U.S. data centers sit within five miles of an operating coal plant, with three of those campuses (Google, Microsoft, Amazon) on top of the same 1976-vintage Xcel coal plant in Becker, Minnesota. The headline number that ran alongside it: 74.9% of generation capacity within 25 miles of the average U.S. data center is fossil-fueled.
The Permian Basin corridor story today is the same phenomenon in a different mode. In Becker MN and the other 18 coal-proximate sites, the data centers are *next to* existing fossil generation that was built for somebody else (a regulated utility's residential customers, originally). The buildout dynamic is: extend the operating life of an existing fossil plant to firm a new AI load.
In the Permian Basin corridor, the data centers are *building their own* fossil generation from scratch. The buildout dynamic is: build a dedicated power plant for one AI customer, isolate it from the public grid, and treat the result as a private commercial transaction.
Both patterns produce the same outcome at the bulk-system level: more fossil generation on the U.S. electric system, longer than would otherwise have been the case, with the costs and emissions borne disproportionately by local communities. The regulatory exit doors are different but the destination is identical.
If you want to see the geographic clustering, the new behind-the-meter projects above are all on the Power Mode map. Filter to Power mode and zoom to the TX/NM border. Each pin's right-rail dossier shows the nearest transmission line, the named owner, and the existing fuel mix on file within 25 miles. As more behind-the-meter generators clear EIA Form 860M (typically once they begin commercial operation), they'll appear as power plants on the map alongside the data centers they serve.
What to watch in the next 90 days
Four things on our watchlist as the corridor takes shape.
1. The Texas Comptroller's JETI decision on Chevron Energy Forge One. Expected within 60-90 days. If approved, the $227 million state subsidy for a behind-the-meter gas plant whose only customer is Microsoft establishes a clean precedent. Expect 5-10 follow-on JETI applications in 2026, several from non-Chevron developers. If denied, the JETI program becomes politically harder to use for behind-the-meter at scale.
2. New Era's nuclear vendor announcement. CEO E. Will Gray II told the Hobbs News-Sun the company is "in final stages" of nuclear technology selection. The vendor identity is the most consequential undisclosed fact about the project. The plausible options are: Holtec (SMR-300), NuScale (VOYGR), GE Hitachi (BWRX-300), TerraPower (Natrium), or a conventional pressurized-water reactor from Westinghouse (AP1000) or BWXT. Each has different NRC licensing timelines, ranging from "already-approved" (AP1000) to "in design certification review" (BWRX-300, VOYGR) to "in pre-application review" (Natrium). The 2028 operational target is realistic only for an AP1000 or AP300; everything else slips to early 2030s.
3. Lea County's next regulation pass. Eight to ten more revisions are expected per the county manager. The political question is whether the next round adds substantive constraints -- water-impact study requirements, public-comment periods, MW caps, disclosure rules -- or continues to codify developer preferences without adding teeth. Watch the agendas of the Lea County Commission meetings through summer 2026.
4. Zenith Volts construction start. Construction was expected to begin within weeks of the August 2025 approval, with operational target late 2027. As of this writing we have not confirmed groundbreaking; the company's website is minimal and the developer is a Wyoming-registered entity with limited public footprint. Whether the 1.3 GW project actually breaks ground -- or sits as an announced-but-stalled headline like many other behind-the-meter proposals -- is the most immediate test of whether the corridor moves from press releases to concrete.
If you have a tip on any of these projects -- a developer agreement, an NRC pre-application document, a utility filing, a community meeting -- email george@poweredbywho.com. The corridor is going to be one of the central energy-and-AI stories of the next 24 months and we want to track it from the ground up.