Microsoft is expanding its data center operations near San Antonio with a recent $1.4 billion investment in Medina County. The Washington-based tech giant is set to construct four new data centers in the county just west of San Antonio, according to state records.
Records with the Texas Department of Licensing and Regulation indicate that Microsoft intends to construct two data centers, making up a combined 489,400 square feet at 2995 U.S. Highway 90 W. Two additional state filings detail plans for another set of data center buildings to be constructed along County Road 381, totaling another 490,000 square feet. Data centers are specialized facilities used to house and manage a large number of computer servers and other hardware that store, process and manage data.
The move nearly doubles Microsoft’s investments in South and Central Texas, which include around 1,112 acres near Castroville and Hondo in Medina County and more than 300 acres in Bexar County, where the company has established a cluster of data centers on San Antonio’s far West Side.
Microsoft declined the San Antonio Report’s request for comment on the new data centers.
The company’s expansion in Texas comes at a pivotal moment, as state officials work to balance maintaining Texas as a data-center hub while ensuring there is enough electricity to power both these centers and the needs of residents and businesses.
Data centers are among the most energy-intensive types of buildings and account for 2% of total energy use in the United States, according to the U.S. Department of Energy. Texas ranks as the second-largest data center market in the country by inventory, trailing only Virginia. They are also highly water intensive, although Microsoft promotes that it operates most of its data centers off recycled water in a closed circuit.
Concerns about the state grid’s reliability remain four years after the events of Winter Storm Uri, with the state’s growth pushing utilities across the state to expand their generation and transmission capabilities.
On Thursday, the Texas Senate’s Business and Commerce Committee heard testimony on a bill that could result in slightly increased costs for “large load” customers such as data centers, as they would face new transmission charges and stricter interconnection requirements.
The bill, introduced by four Texas Republican senators including Donna Campbell of New Braunfels, has four main goals: make sure transmission costs are fairly shared across the state’s grid, set rules to keep the Texas grid reliable, improve how the state predicts energy needs and protect residential customers from power outages by requiring large users to help reduce demand during shortages.
On average, each data center in Texas uses under 100 megawatts — where one megawatt can power around 250 homes on a hot summer day — although that could change in the future, said Pablo Vegas, president and CEO of Texas’ grid operator, the Electric Reliability Council of Texas.
The point of the bill is to make sure the load growth brought on by pro-growth state policies is done in a responsible way that ensures Texans are getting enough electricity to power their homes and businesses, said state Sen. Phil King (R-Weatherford), one of the bill’s co-sponsors.
“Please hear this — Texas is open for business on these matters, we want continued development of these large loads, we need Texas to be in the forefront of cutting-edge technologies,” said King. “The purpose of this discussion is that specifically … is that we want that business in Texas.”
San Antonio is prepared for that growth and is working to stay ahead of demand, said CPS Energy’s Ben Jordan, the utility’s interim senior director of integrated system planning. The publicly-owned utility plays an integral part in building out enough state-level infrastructure to support Texas’s continued growth.
“Texas wants to be a provider to this type of customer,” Jordan said. “We’re agnostic as a municipal utility — we have an obligation to serve, and that’s what we’re going to do.”
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