Oncor Sees 20% Grid Buildout Jump on Back of 293 Gigawatt Data Center Queue

Oncor Electric Delivery is preparing for a major expansion of Texas' power grid driven by a surge in data center applications.

The Dallas-based utility disclosed on November 8 that its next five-year construction program is expected to grow by approximately 20%. This increase follows a queue of data center power requests that reached 293 gigawatts as of September 30.

That total request volume is more than three times the size of Texas' record 91.1-gigawatt summer electricity peak. However, Oncor emphasized that these figures represent connection requests rather than operating facilities or firm power commitments. The utility has not finalized the specific financial forecast for the 2027 through 2031 period, though it projects the base capital plan will rise by about 20%.

The financial scale of the expansion is substantial. Oncor spent 6.3 billion dollars through September of this year and expects to spend approximately 9 billion dollars on capital projects in 2026. This will be its largest annual program to date. A previous base capital plan for 2026 through 2030 totaled 47.5 billion dollars. An increase of roughly 20% against that figure would imply about 57 billion dollars over a similar timeframe, although the years covered in the new projection differ slightly.

The central question for ratepayers is who pays for infrastructure if ambitious projects never materialize. To mitigate this risk, Oncor holds approximately 6 billion dollars in collateral from customers seeking generation or large commercial connections. This financial security is designed to reduce the chance that existing ratepayers absorb costs after developers cancel projects for which construction has already begun.

Not all of that collateral is tied to data centers. Oncor identified about 2 billion dollars in collateral associated with projects in ERCOT's initial large-load review, known as Batch Zero. The utility has not claimed that this collateral eliminates every potential expense for ratepayers. New base rates effective June 1 contributed to a third-quarter net income of 572 million dollars, up from 380 million dollars a year earlier, though these existing rate changes do not prove that proposed data center connections have increased bills.

Regulators have taken steps to separate theoretical requests from real demand. The Electric Reliability Council of Texas approved Batch Zero in June to study major electricity users seeking at least 75 megawatts together. Oncor stated that ERCOT has conditionally classified roughly 24 gigawatts of submitted customer load as base load, including 10 gigawatts already receiving electricity. Another 21 gigawatts are classified as studied load. These classifications represent a narrower group than the entire 293-gigawatt request queue.

ERCOT still must complete its audit of applicants' qualifications and community effects. Oncor expects that review in December and a final transmission plan reflecting Batch Zero in fall 2027. Crucially, Oncor has excluded the Batch Zero projects from its current base capital plan. This exclusion means the immediate spending increase is driven by other infrastructure needs, not just the data centers currently under study.

Infrastructure needs extend beyond data centers. Oncor said its work includes service for an expected 18 megawatts of additional demand from DFW Airport terminal expansions and new two-way electrical feeds for hospitals in Fort Worth's Medical Innovation District. Major transmission projects also bring substantial costs and land-use disputes. Texas regulators approved 424.2 miles of Oncor high-voltage lines in August, with combined estimated costs approaching 3.95 billion dollars. Landowners questioned the routes, while state regulators cited reliability needs. Those estimates do not specify a monthly household bill impact.

The utility's latest disclosure leaves the most consequential decisions ahead. Regulators must determine which requests survive ERCOT's scrutiny, how much construction those projects actually require, and how to distribute the resulting costs.