​America’s economic future depends on energy—and not just more of it, but energy that is reliable, scalable, and affordable.
As demand surges from artificial intelligence, data centers, electrification, and advanced manufacturing, the need for always-on power is becoming more urgent. Intermittent sources alone can’t meet that demand. The next phase of growth will require a serious conversation about energy abundance.

In this episode of the Let People Prosper Show, I sit down with Brian Gitt of Oklo to discuss how advanced nuclear reactors could play a central role in meeting that challenge.

We explore the economics of next-generation nuclear, the rise of AI-driven electricity demand, and how innovative models like build-own-operate could reshape how power is delivered. We also examine the policy landscape and the barriers that continue to slow energy innovation in the United States.

If the goal is stronger economic growth, improved national security, and greater opportunity, then energy policy must focus on expanding supply and enabling innovation—not restricting it.

🎧 Subscribe and share today! Learn more about Brian here: https://briangitt.com/about
📩 Get show notes & more: https://vanceginn.substack.com
com

Originally published on Substack. 

Texas families paid an average of $173.94 per month for electricity last year, among the highest monthly bills in the region, while ERCOT issued repeated conservation requests and came dangerously close to emergency conditions.

At the same time, more than 98 groundwater conservation districts across the state manage water through political boards, regulatory allocations, and bureaucratic permitting rather than clear market exchange.

That is not a coincidence.

Texas does not mainly have a water problem or a power problem. Texas has a control problem.

Scarcity is real. It always will be. The question is whether it is managed through prices, property rights, and competition, or through bureaucrats, government entities, and political favoritism.

One system creates incentives to conserve, invest, and innovate. The other creates shortages, fragility, and permanent fights over who gets what.

Lawmakers should stop confusing government management with a functioning market.

ERCOT Is Not a Free Market Success Story

Texas likes to talk about being different. On electricity, it is different, but not nearly as free-market as many claim.

ERCOT is the centralized operator that manages the flow of electric power for about 90 percent of Texas load. It is not “the market” in any meaningful sense. It is the central gatekeeper of a system built around rules, mandates, political interventions, and constrained price signals.

When one entity manages the grid under heavy political oversight, that is not decentralized competition. That is centralized administration dressed up in market language.

As ERCOT CEO Pablo Vegas recently warned, the system came “incredibly close” to emergency operations that could have ended in rolling blackouts. And the pricing data tells the story.

Texas residential electricity rates reached 16.18 cents per kilowatt-hour in March 2026, nearly 30 percent above neighboring Louisiana’s 12.44 cents, and far above Oklahoma’s 9.09 cents.

Meanwhile, legislation in recent years could undermine the grid’s ability to meet forecasted demand because lawmakers keep steering investment rather than letting competition and price signals do the work. This is when conservation notices have become routine, which is not a weather quirk. It is a structural symptom.

Lawmakers keep trying to subsidize reliability, steer financing, and politically backstop the system instead of letting competition and price signals coordinate supply and demand. That is why Texans keep getting “reforms” without genuine resilience.

If lawmakers truly want a stronger power system, they should move toward more real competition in generation, storage, retail options, transmission incentives, and private investment, not more political planning.

The answer is not to make the centralized framework even more central. It is to reduce the barriers that prevent genuine market discovery and competitive discipline.

Water Systems Are Political Systems First

The same problem exists with water, and in many ways it is worse.

Texas has more than 98 groundwater conservation districts covering all or part of 144 counties, each operating under its own rules with its own political boards.

Decisions about allocation, pricing, infrastructure, and conservation are political long before they are economic. That setup almost guarantees misallocation.

Texas water law also contains the Rule of Capture, a principle that gives landowners broad groundwater claims in theory, but those rights are limited in practice by layers of local regulation and institutional conflict.

As the Texas Commission on Environmental Quality acknowledges, no single state agency regulates groundwater use statewide. Instead, more than 98 politically created districts each set their own rules, creating a patchwork of legal conflict and political rationing rather than a coherent system of exchange.

When the government owns or heavily controls the system, the incentives for long-term stewardship and innovation weaken. Pricing is distorted. Investment decisions become political. And the people making the decisions usually do not bear the full cost of getting them wrong.

That is not resource freedom. That is confusion.

The Price System Is Not Optional

This is where lawmakers need to remember basic economics.

Hayek’s knowledge problem is not an ivory-tower concept. It is a practical warning.

No central authority knows the correct future price of electricity in every hour across Texas. No board knows the right amount of water to conserve, move, or ration across every county and basin. No agency can process the changing information that millions of people and businesses reveal through market choices.

Prices do that.

Prices signal scarcity. Prices tell producers when to invest. Prices tell consumers when to conserve. Prices help entrepreneurs discover better technologies and business models.

When lawmakers suppress those signals through subsidies, political allocation, and government ownership, they should expect misallocation.

As Milton Friedman taught, do not judge policy by its intentions. Judge it by its results. Texas keeps getting the wrong results.

Property Rights and Privatization Fix Incentives

If lawmakers want lasting improvement, they need to think less like players and more like referees.

The answer is stronger property rights and more privatization of these resources.

When something is privately owned, someone has a direct incentive to protect it, improve it, and use it efficiently. When something is managed by government, responsibility is diluted and politics fills the vacuum.

That is true for water infrastructure. It is true for electricity generation, transmission, and storage.

Private owners respond to profit and loss. Government entities respond to politics and pressure.

Private firms that fail lose money and market share. Public entities that fail usually ask for more funding and more control.
As the Mises Institute explains, the state is the one institution that can compel payment, block competition, and preserve failure indefinitely.

In a real market, even a dominant firm faces pressure from innovation and rivals. In politics, failure can survive for decades.
Privatizing these systems, or moving much closer to genuine market competition, would not make scarcity disappear. It would do something better. It would make scarcity manageable through real incentives.

The Unseen Costs Are the Biggest Ones

This is where Bastiat still matters.

The seen is the state-backed loan program, the public utility expansion, the district board meeting, or the ribbon-cutting for a politically favored project.

The unseen is everything Texas never gets because government crowds it out.

You do not see the private water trading platform that was never created because the legal framework discouraged exchange. You do not see the private grid innovations that were never financed because lawmakers decided to steer capital somewhere else. You do not see the smaller competitors who never entered the market because they could not break through the political structure of the system.

Those unseen costs are often far larger than the public costs everyone debates, and no budget line ever captures them.

The Bottom Line

Texas does not need more state management of water and power. It needs less.

A centralized grid gatekeeper and government-dominated water systems do not solve scarcity. They politicize it. They weaken price signals. They discourage competition. They protect bad decisions from market correction.

If lawmakers want abundance, resilience, and affordability, they should trust the institutions that actually coordinate scarce resources well: private property, market prices, competition, and voluntary exchange.

Texas should be leading the country in resource freedom. Too often, it is still acting like scarcity must be managed from the top down. That is backward, and it is costing Texans.

Five Takeaways for Policymakers

1. Move ERCOT toward real competition. Reduce barriers to private generation, storage, and retail entry. Let price signals coordinate supply and demand rather than political steering. Every layer of intervention added since Winter Storm Uri has made the system more rigid, not more resilient.
2. Consolidate or eliminate redundant water districts. More than 98 groundwater conservation districts with conflicting rules and political boards is not a system. It is a patchwork of misaligned incentives. Simplify the framework and move toward tradable water rights with clear ownership and market exchange.
3. Clarify and strengthen the Rule of Capture into a workable property-rights system. Water trading works where ownership is clear and exchange is legal. Reform groundwater law to enable genuine market exchange rather than political rationing.
4. Apply Bastiat’s test to every energy and water bill. Ask not just what the bill claims to do, ask what private innovation it displaces, what competition it forecloses, and who bears the unseen cost. If the answer is taxpayers and future consumers, vote no.
5. Privatize what government does not need to own. Water infrastructure, grid assets, and distribution systems managed by private owners under competitive discipline perform better than politically managed ones.

Closing

I’ve spent decades working across more than 20 states and the federal government on property rights reform, energy market policy, and the economic case for limited government.

What the data consistently show is that markets, when free to operate, coordinate scarce resources better than any government board ever has. The evidence is not close.

Texas has every advantage: energy abundance, economic dynamism, and a constitution that respects property rights. What it lacks is the political will to trust markets to do what politicians cannot. That is the will the 2027 session needs to find.

Stay engaged, stay principled, and keep letting people prosper.

Originally published on Substack. 

​A fresh round of anxiety over Texas data centers is building in Austin, and lawmakers need to get this right. The noise is familiar: grid strain, water use, local disruption, and rising demand from AI. The temptation is also familiar: form a committee, write a mandate, and pretend government can centrally plan the next phase of the digital economy better than markets can.

That instinct would be a costly mistake.

The better approach is to understand what data centers actually are, why they matter to economic growth, national security, and daily life, and how Texas can meet the challenge with more supply, more transparency, and more competition instead of more bureaucracy.

The goal should not be to block growth. It should be to build abundance.

A recent Texas Policy Research explainer captures the tension well. Texas is attracting major data-center investment because it has long offered low taxes, abundant land, and a relatively competitive electricity market. But those same projects are exposing weaknesses in the state’s energy and water systems, especially when policy gets in the way of price signals and private adaptation.

Start with the basics.

A data center is not just a warehouse with computers. It is physical infrastructure that stores, processes, and transmits information for the modern economy. Every search query, cloud backup, digital payment, video stream, logistics update, telehealth session, and AI-generated response relies on this backbone.

The Goldwater Institute is right to call data centers the “industrial backbone of the modern economy.” As of March 2025, the United States had 5,426 data centers, and global investment in data-center infrastructure could approach $7 trillion by 2030, with more than 40 percent expected in the United States.

Texas is central to that future. CBS Texas reports that the state already has more than 400 data centers and could become the largest data-center market in the world. It highlights major projects from firms like Digital Realty and says Texas data-center load could more than double, accounting for roughly 30 percent of total U.S. demand by 2028.

That is not a niche trend. That is Texas sitting at the center of America’s technology race. This is why the issue is bigger than convenience. Data centers matter for national security, too.

The same infrastructure that supports commercial AI and cloud services also supports cybersecurity, defense, communications resilience, and America’s broader technological lead. If the United States wants to compete with China, secure sensitive systems, and lead in AI, then it needs the physical infrastructure to do it.

A country cannot talk tough about technological leadership while acting squeamish about building server capacity, fiber connections, and reliable power.

Lawmakers also need a clearer picture of how these facilities are built.

According to GBC Engineers, data centers must handle massive structural loads from server racks, backup generation, batteries, cable trays, transformers, and cooling equipment. They require large open spans, flexible layouts, and rapid construction to keep pace with changing technology.

That is why developers often use prefabricated systems and precast concrete. These are specialized industrial assets, not vanity projects for big tech.

Now to the hardest concern: electricity.

Yes, data centers use a lot of power. Of course they do.

They process huge amounts of information nonstop, and computing creates heat that has to be removed.

The problem is not that demand rises. The problem is when policymakers respond as if demand itself is suspicious.

Rising electricity demand is what you should expect in a growing economy with more AI, more digital commerce, more advanced manufacturing, and more connectivity.

The Cato Institute notes that U.S. electricity demand, after staying mostly flat for years, is now climbing because of data centers, AI, manufacturing, and electrification. Cato says U.S. data centers consumed about 183 terawatt-hours of electricity in 2024, roughly 4 percent of total consumption, and projects from the International Energy Agency suggest that could rise to 426 terawatt-hours by 2030.

The answer to that is not to crush data centers. The answer is to expand supply and let large users bear their own costs.
That is where a lot of current policy thinking breaks down.

The Texas Policy Research piece notes that ERCOT has documented one of the sharpest increases in projected load growth in its history, with large-load projects entering the queue faster than generation and transmission can be built. It also flags Senate Bill 6 as an example of lawmakers leaning toward more regulatory control over large-load customers rather than relying on stronger market incentives.

That is exactly the kind of drift Texas should resist.

Here is the key point policymakers need to understand: grid strain is not proof that data centers are bad. It is often proof that policy has constrained supply, delayed investment, or socialized costs through monopoly utility structures.

The Goldwater report argues that high electricity prices are largely driven by policy choices such as mandates, fuel restrictions, and barriers to reliable generation, not by the mere existence of data centers. It even notes that Virginia maintains below-average electricity rates despite hosting one of the largest data-center concentrations in the world.

If data centers automatically wrecked affordability, Virginia would be a mess. It is not.

That should sound familiar. In my earlier writing, I made the same basic argument: the deeper problem is not private innovation but government distortion through monopoly utility structures, mispriced risk, and political meddling.

Data centers are exposing weaknesses in the system. They did not create those weaknesses out of thin air.

Connection costs are a legitimate concern, but they still do not justify panic. A large new facility can require substation work, transmission upgrades, and interconnection investments. If those costs are dumped onto ordinary customers, that is a problem. But the fix is not to let government decide which projects deserve power. That means better pricing, faster approvals, more direct contracting, more private generation, and more room for microgrids or other parallel systems.

This is where the Cato paper is especially useful. It argues for private electricity grids and consumer-regulated arrangements that allow electricity-intensive users to secure power without forcing everyone else to subsidize them. That is a much better path than trying to ration demand from the Capitol.

Responsibility should follow decisions. If a company wants to build a power-hungry facility, then it should have strong incentives to contract, generate, conserve, and invest accordingly. Markets can handle that better than hearings can.

Water is the other major concern, and again, lawmakers need more light and less heat.

The Texas Policy Research explainer is fair to note that Texas still lacks complete statewide reporting and that both direct cooling use and indirect water use through power generation matter. That uncertainty is real. But uncertainty is not the same thing as a case for blanket restrictions.

The Goldwater Institute adds important context: firms are already reducing or eliminating potable-water use in many cases through closed-loop cooling, air-cooled systems, and reclaimed-water designs.

Many modern data centers do not need pristine municipal drinking water just to cool equipment, and they have strong incentives to conserve because water costs money. That is how profit and loss work. Waste is expensive. Efficiency pays.
This is the bigger lesson policymakers need to absorb.

The public conversation too often treats data centers as though they are imposed on passive communities by giant corporations. But Texas has always been strongest when it trusted property rights, voluntary exchange, and personal responsibility more than political control.

If a developer wants to buy land, risk private capital, line up power, manage cooling, and meet clear rules, who exactly should decide that project is not worth building?

In a free state, that answer should not be “a handful of politicians who are nervous about headlines.”

That does not mean no rules. It means the conditional rules.

Texas should insist on transparency and clear property-rights protections. It should avoid subsidies that pick winners and losers. It should let prices reflect scarcity. It should allow more generation, faster infrastructure expansion, and more innovation in private power arrangements.

That is what abundance looks like.

The alternative is the politics of scarcity: bottling up supply, forcing new demand through fragile systems, then blaming growth for revealing the weakness. That is not stewardship. That is surrender dressed up as caution.

Texas should be the state that shows the country how to handle this well. Not by pretending the digital economy can run without physical infrastructure. Not by demonizing electricity demand as though growth itself were irresponsible. And not by letting government decide which parts of the future are allowed to exist.

Data centers are not the enemy. They are part of the foundation of prosperity, security, and modern life. The right question is not how to stop them. It is how to make Texas abundant enough to support them.

Legislative Snapshot

• Data centers are core Texas infrastructure for AI, payments, communications, logistics, and national security, not optional tech toys.
• Electricity and water concerns are real, but they are mostly challenges of supply, pricing, and transparency, not reasons to regulate growth away.
• The best path is abundance: protect property rights, avoid subsidies and mandates, let large users pay their utility bills, and expand energy and infrastructure through market competition.

Subscribe and share this with policymakers, staff, or media who need a clearer framework than the usual panic. The state that leads on abundance will lead on technology, too.

Originally published on Substack. 

Americans are getting hit again — at the pump, on utility bills, and soon at the grocery store. This week’s surge in oil, diesel, and shipping costs is being framed as a Middle East story. That is only half true. The conflict is real and it matters. But the reason this shock is landing so hard on American families is that Washington left them exposed.

Let me give you the straight economics.

What Just Happened
​
On February 28, the U.S. and Israel launched Operation Epic Fury — coordinated strikes on Iranian military targets, nuclear sites, and leadership, resulting in the death of Ayatollah Ali Khamenei. Iran’s response was swift and targeted where it hurts most: the Strait of Hormuz.

Iran’s Revolutionary Guard declared the strait closed, threatening to set ablaze any vessel attempting to pass. At least five tankers were damaged, two personnel killed, and about 150 ships stranded in open Gulf waters.

As of March 4, only five vessel crossings were recorded through the strait — compared to a seven-day average of 27. Maersk, Hapag-Lloyd, MSC, and CMA CGM — the world’s largest shipping firms — have all suspended operations and rerouted vessels around Africa’s Cape of Good Hope, adding weeks to transit times and billions to costs.

“When analysts have looked at the things that could go wrong in global oil markets, this is about as wrong as things could go at any single point of failure.” — Kevin Book, Clearview Energy Partners

The numbers hitting family budgets are real. As of March 5, the national average for regular unleaded hit $3.25 per gallon — up from $2.98 just one week ago, a 9% weekly surge that is the sharpest in nearly four years. Diesel has climbed to $4.124 per gallon — the highest since December 2023. The benchmark freight rate for Very Large Crude Carriers hit an all-time record of $423,736 per day — a 94% increase in a single weekend. And analysts at Barclays and Goldman Sachs warn Brent crude could reach $100 per barrel or higher if disruptions persist — the same level that sent gasoline to an all-time national average of $5.016 per gallon after Russia invaded Ukraine in 2022.

Why Americans Pay Global Prices No Matter How Much We Produce

Here’s what I hear constantly — and what my peer-reviewed research on oil and gasoline markets confirms: oil is a globally traded commodity.

When a chokepoint carrying roughly 20% of global oil consumption shuts down, prices rise for everyone. About 70% of the oil passing through the Strait goes to China, India, Japan, and South Korea. When their supply tightens, their economies slow, global demand reshuffles, and American families pay more — at the pump, at the grocery store, and on every freight bill embedded in the goods they buy.

Our domestic production is a genuine buffer. Without it, we’d already be at $4 or more per gallon. But it is not a wall. The global market is the global market. And right now, the global market is in crisis.

This Lands on Families Already Squeezed

This shock does not arrive in a vacuum. Before this week, GasBuddy had forecast annual average prices below $3 per gallon for the first time since 2020 — a genuine bright spot for families still recovering from the inflation surge of recent years. That relief is now at serious risk.

Economists warn that if prices remain elevated, the retail industry could face a significant cooling period as consumers prioritize fuel and essential groceries over discretionary spending. FedEx and UPS have already implemented general rate increases of 5.9%, but effective shipping costs are rising by as much as 18% once fuel surcharges are factored in.

This is Bastiat’s “seen and unseen” in real time. The seen is the conflict in the Gulf. The unseen is the American truck driver, commuter, farmer, and family paying more because policymakers made the economy less adaptable, less productive, and more dependent on decisions made far from home.

Government Failure: The Full Picture

What we are living through is not just a geopolitical event. It is the compounded consequence of years of government failures — domestic and foreign — that left American families with no cushion.

Failure 1: Restrictions on domestic energy supply.

The U.S. is the world’s largest oil producer. But decades of permitting delays, leasing restrictions, pipeline blockades, refinery constraints, and ethanol mandates have suppressed what we can produce and process. My peer-reviewed research documents how ethanol legislation distorts gasoline price dynamics, adding costs and volatility that fall directly on consumers. A free country that wants affordable energy does not handicap its own supply base and then act surprised when global turmoil shows up in family budgets.

Failure 2: Tariffs as a hidden energy tax.

Tariffs are taxes. Before this week’s shock, they were already raising costs on steel, equipment, and industrial inputs the energy sector needs to produce, refine, and move fuel. Protectionism doesn’t sit off to the side as a separate policy debate — it compounds energy costs across the entire supply chain. You cannot claim to care about affordability while defending taxes on the inputs that power the economy.

Failure 3: Fiscal recklessness that eroded family resilience.

Washington spent trillions of taxpayer dollars in recent years and still left families with less cushion. Electricity prices have climbed 36% over the last five years, and the federal government got it off the way for businesses to build the energy infrastructure or refinery capacity that would give families real protection against shocks like this one.

Government did not build a meaningful cushion for working Americans. It helped erode one.

Failure 4: Strategic dependence on a volatile region.

The world — including America’s key trading partners — remains deeply dependent on Middle Eastern energy flows. As Ali Vaez of the International Crisis Group put it: “Closure of the Strait of Hormuz would disrupt roughly a fifth of globally traded oil overnight — and prices wouldn’t just spike, they would gap violently upward on fear alone.”

The policy answer is more domestic production, more free trade, and faster permitting — not less.

The Answer Is Not Price Controls

It never is. Price caps feel compassionate until the shortages, reduced investment, and supply pullbacks show up.
We have run this experiment before — on gasoline, on rent, on prescription drugs. It fails every time because it attacks the symptom while making the cause worse.

Cap the price of energy without increasing supply and you get less energy. That is not a theory. That is economics.

The Bottom Line

Energy price shocks are not simply acts of fate. They are the result of geopolitical risk colliding with bad policy choices made over many years. War triggered this spike. Government failures made it more painful than it had to be.

As Milton Friedman taught us: don’t judge policy by its intentions — judge it by its results. Families are the ones paying for the gap between rhetoric and reality. They deserve better.

Five Takeaways for Policymakers

1. Unleash domestic energy production now. Fast-track permitting, expand pipeline and refining capacity, and stop treating domestic abundance as a political problem. Every barrel suppressed by regulatory red tape is a barrel held hostage to global volatility.

2. End tariffs. Tariffs on steel, aluminum, and industrial equipment compound the price shock families are already absorbing. Free trade lowers costs — protectionism raises them.

3. No price controls — full stop. A gas price cap sounds compassionate. The unseen is shortages, long lines, and reduced investment in the production that would bring prices down naturally. We’ve run this experiment. It fails.

4. End the Strategic Petroleum Reserve so the private sector best allocated oil rather than holding oil out of the market thereby driving prices higher.

5. Make affordability the governing standard. Every energy policy decision should be evaluated first by its impact on the cost of living for working Americans — not its appeal to any political constituency.

Closing

I’ve spent years studying how energy prices move through supply chains and how government intervention distorts them. What the data — and Friedman and Bastiat — consistently show is that the market, when free to operate, is the fastest and most reliable path to lower prices. Government failure is what makes energy expensive. Free markets is what makes it affordable.

Policymakers still have time to respond. Families don’t need more speeches about compassion while Washington keeps making energy scarcer and more expensive. They need more supply, more freedom, and more discipline. That is how you lower prices. That is how you strengthen the economy. And that is how you let people prosper

Originally published on Substack.

America is in the middle of a quiet but consequential infrastructure race.

Demand for cloud computing, artificial intelligence, digital payments, telehealth, logistics, and cybersecurity is exploding.
The physical backbone of all of it is data centers.

Whether states attract that investment or drive it away will hinge less on technology and more on policy choices.

A new report from the Goldwater Institute makes the case clearly: data centers are not a threat to economic prosperity.

They are essential infrastructure for the modern economy. Yet lawmakers across the country are responding with restrictions, moratoria, and energy rules rooted in scarcity thinking rather than market realities.

This debate is not really about data centers. It is about whether states choose abundance or artificial scarcity.

Data Centers Power Everyday Life

Data centers are often discussed as if they were niche projects for “big tech.” In reality, they support daily economic activity most people take for granted. Navigation apps, cloud storage, online banking, remote work platforms, streaming services, and AI tools all rely on data centers operating continuously behind the scenes.

Artificial intelligence only heightens the stakes. AI systems require immense computing power to train and operate, and that capacity does not live on personal devices. It lives in data centers. States that want the productivity gains AI promises cannot reject the infrastructure that makes those gains possible.

As Goldwater explains, states with predictable permitting, clear land-use rules, and respect for property rights are attracting billions in private investment. States that politicize infrastructure are not stopping growth. They are redirecting it elsewhere.

The Energy Argument Is Backward

The most common objection to data centers is electricity demand.

Critics warn that growth will overwhelm grids and crowd out households and small businesses. That concern sounds reasonable until you examine the assumptions underneath it.

Most demand forecasts assume data centers must draw their full energy load from the grid. That assumption is wrong.
Many data centers already generate power on site or plan to do so. With the freedom to innovate, they can deploy small modular nuclear reactors, clean reliable energy systems, and other private generation technologies to meet their own needs and, in some cases, provide surplus power back to the grid.

This is where insights from a recent Cato Institute briefing paper are critical.

Cato explains how private electricity grids and consumer-regulated power arrangements offer a parallel path to reliability outside monopoly utility systems.

When consumers and firms are allowed to contract for power directly or generate it themselves, energy supply expands, innovation accelerates, and risk is better aligned with decision-makers.

If electricity demand estimates assume 100 percent grid dependence, they exaggerate the problem and ignore the solution.

Policy Is Creating the Scarcity It Claims to Fear

Unfortunately, some states are moving in the opposite direction.

Texas passed legislation last year that reportedly restricted data centers from producing their own electricity while simultaneously offering targeted tax incentives. That approach discourages self-generation while shifting risk onto captive ratepayers.

South Carolina and other states are now debating similar paths. At a recent FITSNews forum, participants asked how states should redefine economic development for the technology age. The wrong answer is to block or micromanage the infrastructure of that economy.

Polling from the South Carolina Policy Council shows voters care about affordability and growth, not symbolic regulation.
That skepticism is rational, especially in states still dealing with the fallout from failed government-run energy projects like V.C. Summer, where ratepayers were forced to subsidize political decisions that collapsed.

Ratepayers Should Not Be the Backstop

There is a legitimate concern buried in this debate: households and small businesses should not be forced to subsidize large private users if utilities expand capacity to serve them. That concern is valid. But bans and restrictions are not the answer.

The answer is competition.

Allow off-grid generation, private power contracts, and parallel electricity systems.

Let large users internalize their energy costs instead of socializing them. When firms pay for their own power, they invest in efficiency, reliability, and innovation.

Markets do that naturally. Monopoly utilities do not.

As I argued previously in Stop Blaming Data Centers. Start Fixing Energy Policy, data centers are not the cause of grid stress. They expose weaknesses created by decades of overregulation and centralized control.

Abundance Beats Regulation Every Time

The central lesson from both the Goldwater Institute and Cato Institute research is the same: competition is the best regulator.

Firms disciplined by markets respond faster, allocate resources more efficiently, and innovate continuously. Heavy-handed regulation freezes technology in place and locks in today’s inefficiencies.

The same logic applies to water use. Modern data centers recycle water extensively and are often more efficient than traditional industrial users. The evidence does not support claims that they pose a significant strain on water resources.

States that choose abundance expand supply, lower costs, and attract investment. States that choose scarcity ration growth and watch opportunity leave.

A Final Note for Lawmakers

Data centers are coming whether policymakers like it or not. The only real question is where they will be built.

States that embrace private energy generation, competitive electricity markets, and regulatory humility will win jobs, capital, and technological leadership. States that respond with fear-driven rules will export those benefits elsewhere.

The choice is not between growth and responsibility. The choice is between markets that adapt and politics that stall.

Let people build. Let energy supply expand. Let competition work.

Recap for Legislators:
​

• Data centers are core economic infrastructure, and restricting them will not stop demand for digital services or AI — it will simply push investment, jobs, and tax base to other states.
• Electricity concerns are policy-driven, not technology-driven. Allowing private, off-grid power generation and competitive electricity supply prevents grid crowd-out and protects ratepayers better than bans or mandates.
• Energy abundance beats regulation. Expanding reliable supply through competition, private generation, and nuclear solves grid stress and supports growth without new bureaucratic control.