Rockwall, Texas – May 26, 2024: People strolling near the lighhouse during a beautiful sunset at The … [+]
Rayburn Electric, the rural electric cooperative generation and transmission association located northeast of Dallas, is preparing for the future as best it knows how: building more generation.
That generation plus purchases – Rayburn’s total capacity to serve the four rural electric distribution companies for which it is the bulk power supplier — is 1200 megawatts.
But like many utilities in Texas, it is in discussions with data center operators who may want to build in the Rayburn service area. That would triple or quadruple the load for Rockwall-based Rayburn, its president and CEO, David Naylor, told me. No deals have been signed, but there are ongoing discussions, he said.
Electricity is one of several siting concerns for data centers. They need water and internet service, too, Naylor noted.
Data center operators are examining how much self-generation they can do and how much power they would need from the local utility.
Water, in particular, is a growing concern in Texas — and has been getting a lot of attention from legislators. As Naylor said, you can build generation and transmission, but you can’t build water.
Water Not A Problem For Rayburn
The water supply isn’t a problem for Rayburn, but it is always mindful of it, he told me. There are several large water impoundments near Rayburn and the 16 counties served by the cooperative.
In Rayburn’s case, the data center operator would seek electrical service from one of the four distribution utilities for which Rayburn is the power source. Many rural electric utilities are set up with an association which manages bulk power and transmission while the member utilities distribute the power to customers.
Because of their obligation to serve, Naylor said, “We cannot say, ‘No.’ But we can say, ‘Wait a bit.’ ”
He also noted that the data centers are getting more flexible and are sharing their data processing loads among centers, much the way that utilities wheel power to where it is needed at a particular location.
Meanwhile, Rayburn is moving ahead to service its traditional load, which is growing fast year-over-year, Naylor said.
It hopes to break ground later this year on a new 570 MW gas turbine plant. Naylor told me they planned the plant because of the relentless growth in the Dallas metroplex of around 10 percent a year.
Naylor and Rayburn are ecumenical about fuel source, but gas was the obvious choice. Rayburn already owns one large gas-fired plant.
“We’re putting in 10 peaking units, each unit being about 57 megawatts. They will be dispatchable, quick start and ready for our load,” Naylor said, adding, “They are just what I think the ERCOT market needs.”
Less Affected By IRA Funding
Rayburn isn’t as discomforted as many utilities have been by the Trump administration’s abrupt freezing of Inflation Reduction Act funding. Funding for its new plant will come mostly from low-interest state loans under a program established by the Texas Legislature in the aftermath of Winter Storm Uri in 2021, which knocked out power across the state.
That doesn’t mean that Rayburn is set against solar and wind, but its choices have been determined by the market and available resources, Naylor explained.
Naylor has said in the past that solar especially fits the “shape of Rayburn’s load” and over the years, it has sought to increase solar purchases.
Recently, Naylor said Rayburn had a couple of solar projects pull out. It has one solar contract, which amounts to about 10 percent of its load.
Overall, Rayburn has been adding to its own generation capacity. Last year Rayburn generated 70 percent of its load — and that load is growing. “We are seeing some significant jumps in load as we do our future forecasting,” he said.
Rayburn’s traditional load is 90 percent residential, which is what is causing the current growth spurt. Should Rayburn become part of the data center expansion in Texas, it will be actively seeking to generate a lot more power and to buy in power as never before.
A potential quadrupling of load is no small matter, at once tempting and challenging.
