The Call Landowners Are Getting
A buyer calls about your acreage. They want a large tract, near transmission, and they want it under option for a year or more. The word "data center" comes up early. So does a price well above what nearby land has traded for.
That call is real in Texas. So is the risk behind it. The value of a data center offer depends on one thing the buyer does not control: power. This fall, the state made that dependency harder to ignore.
What Changed at ERCOT
On August 3, 2026, Governor Greg Abbott directed the Public Utility Commission and ERCOT to verify and audit data center projects in the interconnection process before more of them move forward. A Holland & Knight client alert summarized the scope: tax incentives, public financial assistance, electricity demand, on-site generation, water sourcing, cooling, community impacts, and project ownership.
Forbes reported on October 13 what followed:
- ERCOT has been asked to connect about 474 GW of new demand. The Governor's office says about 90% of those requests are data centers.
- For scale, ERCOT set a preliminary all-time peak of 91,134 MW on July 22, 2026.
- ERCOT paused approvals to energize data center and crypto-mining sites of 75 MW or more.
- In its first study group, called Batch Zero, 362 large loads can proceed. 373 projects totaling 302.2 GW were excluded.
- Of 9,456 MW of large loads already approved to energize, ERCOT observed a July peak of 4,370 MW, or 46% of approved capacity.
Forbes also made the point that matters most to a landowner. The 474 GW figure is a queue of requests, not a demand forecast. Filing a request costs far less than building a data center.
Why This Matters for Your Land
A data center buyer is underwriting power first and dirt second. If the power path stalls, the land thesis stalls with it. The buyer's response is usually to extend, renegotiate, or walk.
The demand is not imaginary. The Texas Real Estate Research Center's Q2 2026 rural land report put West Texas at a record $3,008 per acre, up 14.29% year over year, and attributed the gains mainly to non-agricultural demand, particularly energy and AI-related infrastructure. But regional strength does not make every offer bankable. A premium price under a long, cheap option is not a sale. It is a bet the buyer is making with your land as the stake.
The Real Cost of a Long Option
While your land sits under option, it is off the market. Other buyers move on. Builders, investors, and family offices that might have paid a market price find other tracts. If the option lapses, you return to market a year or two later with a story attached.
The carrying costs stay with you the whole time. Taxes, insurance, and upkeep do not pause for an option. If the option payment does not cover them with room to spare, you are financing the buyer's due diligence.
The Comparable Problem
A headline price from a power-dependent buyer is not a comparable sale until it closes. Neighbors who hear the number may anchor to it. If the deal fails, that anchor can make an otherwise sound tract harder to sell at a market price.
Questions to Ask Before You Sign
- Where is the project in the ERCOT process? Ask whether the load was included in or excluded from Batch Zero, and on what basis. Ask for documentation, not a verbal summary.
- Who is the buyer? A site developer assembling land to resell to an end user carries different risk than an operator building for its own use. Ownership is one of the items the state's audit examines.
- How much money goes hard, and when? Look at the initial option payment, extension fees, and when deposits become non-refundable.
- How long is the term? Count every extension. Then measure the full term against ERCOT's published schedule.
- What survives if the deal dies? Easements, surveys, studies, and recorded memoranda can encumber title after a failed deal. Know what gets released and when.
- What is the price without the data center? Know your land's value to builders, investors, and agricultural buyers. That is your floor and your fallback.
Your attorney should review the option agreement. These questions are about the economics around it.
The Dates to Watch
Per the Forbes report, ERCOT files eligibility and community impact reports with the PUC on December 10, 2026. The PUC discusses them at an open meeting on December 17. Study results for loads that pass are due April 9, 2027.
An option signed today will likely run through every one of those dates. Price the uncertainty into the terms. Do not absorb it for free.
Know Your Number First
The strongest position in any data center negotiation is knowing what your land is worth without one. If you are fielding an offer or weighing a sale, request a confidential Land Value Opinion at powerlandgroup.com. We will tell you what the land supports in the market as it stands, and what an option has to pay to be worth the wait.