Texas Politics May Delay Chevron Data Center Decision, Semafor Reports
Chevron is building a natural gas power plant in West Texas to supply a Microsoft data center under a long-term power deal.
Background
A final investment decision on Project Kilby, a huge gas-powered data center in West Texas, could slip from the end of this year to 2027 because of state politics. Tim McDonnell reported this news for Semafor on Thursday.
Project Kilby will use about 2.67GW of on-site gas turbines to power a Microsoft (read this guide) data center. Chevron signed a 20-year power deal with Microsoft for the site in June, and first power is planned for 2028.
Delays Caused by Politics
The likely delay follows Governor Greg Abbott’s order last month to stop all new environmental permits for data centers. The pause lasts until state grid and water agencies finish audits. This order also covers projects that make their own power, like Kilby.
“Permitting and regulatory side has caused some slowdown or potential delay,” Daniel Droog, Chevron’s vice president for power solutions, told Semafor, referring to AI projects across Texas.
Project Status
Droog confirmed that Kilby is still on track to produce power by 2028. Early earthworks are underway while developers finish building contracts and wait for permits.
Chevron’s partner, Joulent, grew out of the investment firm Engine No. 1. Its new CFO, Michael Wortley, expects the project to get its permits.
Political Focus
Data centers have become a major issue in Texas ahead of November’s elections, with candidates in both parties calling for tighter water rules.