The Skybox Datacenter Controversy

SAN ANGELO, TX — A proposed hyperscale data center by Dallas-based Skybox Datacenters on 343-374 acres of city-owned land northeast of San Angelo has ignited community discussions, blending promises of economic growth with concerns over resource demands. The site, formerly the old city farm near U.S. Highway 67 and City Farm Road, could host up to six buildings and tap into high-capacity power lines carrying wind- and solar-generated electricity from West Texas to urban centers like Austin and Houston.

Michael Looney, Vice President of Economic Development for the San Angelo Chamber of Commerce, clarified that the facility would not strain the city's grid. Instead, it would draw from the underutilized AEP Red Creek Substation, which operates at 345 kV with a transformer rated at 250 MVA (approximately 250 MW capacity). During peak loads, over 250 MW can serve local needs, but the substation mainly acts as a pass-through, with San Angelo using only about 10% of its capacity. Project literature indicates a total power draw of up to 600 MW, aligned with the backup generators' 600 MWh electricity generation capacity for resilience during outages. Looney emphasized that the center would not consume power intended for the city and the benefit is that this datacenter can potentially generate $27 million annually in franchise fees from its electricity use.

Power consumption was one of four key concerns raised by a crowd—largely left-leaning and organized via the NextDoor app—at an impromptu meeting on December 29, 2025, in a packed conference room at Stephens Central Library. Other objections included water usage, noise pollution, and a perceived lack of transparency from City of San Angelo and Tom Green County officials.

The meeting, citizen-led rather than city-hosted, drew Mayor Tom Thompson, Councilmembers Mary Coffey, Karen Hesse Smith, and Patrick Keely (whose District 4 includes the area), Assistant City Manager Rick Weise, and Looney. Attendees voiced frustration over the project's rapid pace, with some feeling it was a "done deal" despite ongoing approvals.

Electricity Needs in the AI Era

San Angelo's concerns mirror a statewide scramble as Texas capitalizes on the artificial intelligence (AI) boom. Entrepreneurs and elected officials are racing to attract data centers, but municipalities grapple with supplying the necessary power and water.

The Texas Legislature and the Electric Reliability Council of Texas (ERCOT) addressed this in 2025 through Senate Bill 6 (SB 6), passed May 27 and signed by Governor Greg Abbott on June 20. The bill targets "large flexible loads" (facilities demanding ≥75 MW), requiring them to share infrastructure costs, provide financial assurances, and allow curtailment during shortages. ERCOT forecasts data centers driving demand from 9.7 GW in 2025 to 26 GW by 2030, part of large-load requests (73% from data centers), necessitating 3,000 miles of new power lines. Overall ERCOT energy use was projected to rise from 464 TWh in 2024 to 487 TWh by today, the end of 2025.

For San Angelo, this means power issues aren't isolated—the state is ramping up capacity via SB 6 and ERCOT planning. Skybox's phased build-out, starting with one or two buildings within 12-18 months of groundbreaking and expanding through 2030, aligns with this timeline. The question remains: Will electricity availability keep pace?

Water and Noise Objections

Water consumption drew sharp questions. San Angelo's system produces about 20 million gallons daily. Looney explained the closed-loop cooling system (using water and propylene glycol) requires an initial 1.5 million gallons per building—9 million total for the campus—but staggered over phases one time over many years — like a car's radiator. Ongoing daily use would be minimal at 15,000 gallons, mostly for employee facilities like bathrooms, comparable to a Walmart or Home Depot. The fluid recirculates and lasts 5-6 years before flushing.

Noise from cooling fans and monthly generator tests (for the 600 MW backups) was another worry, especially for nearby PaulAnn and Harriett neighborhoods. The site abuts a 4H gun range facility and the Tom Green County Sheriff's gun range, with the county jail closer to homes—yet no major gunfire complaints have surfaced. Critics fear reduced property values, though proponents argue existing uses haven't harmed them, so a data center further east of a county jail may have limited additional impact.

Transparency

Transparency dominated the discussion. The meeting stemmed from NextDoor posts by "concerned citizens," not the city. Attendees like Jamal Schumpert, Keely's recent election opponent, accused officials of rushing the process.

"We campaigned together for transparency," Schumpert said, chastising Keeley for not stepping forward sooner in the datacenter debate.

Weise noted competitive pressures and outdated ordinances, prompting a consultant hire to update rules. The site, recently annexed, was rezoned from "Ranch and Estate" to "Light Manufacturing," approved December 2, 2025, with a second reading set for January 13, 2026.

Thompson defended the pace, highlighting fiscal woes: "Here's the whole thing for the City of San Angelo and this data center. Every new sports facility, every road that everybody can't get fixed right now (because) we're more broke as it is now, alright? We barely have enough money to get by. Public safety takes 120% of our (property tax) budget. Taxes are burdensome. If we can bring something like this on, it totally changes our outlook."

He referenced $400 million needed for a new water treatment plant: "If this (datacenter) disappears or we miss their timeline, we can't lessen the burden on anybody... If we hold something up for a week or two and miss a timeline... it may cost all of us lots of money. Because if the tax dollars come in and drive the tax rate down, that's how we're willing to say: Imagine this project, and what it can mean for San Angelo."

Economic Stakes

Driving support is the economic windfall. San Angelo's $7.9 billion property tax base could nearly triple with Skybox's $21-22 billion valuation, adding millions in property taxes and even more in franchise fees. No incentives are provided to attract Skybox to San Angelo, unlike many projects across the state. Thompson warned alternatives include developers building a similar datacenter just outside city limits, evading city taxes while using the same limited resources.

Rumors of additional data centers on county land add urgency. As San Angelo weighs the proposal, the January 13 vote looms, greenlighting a transformative—but controversial—project. The city has a dedicated webpage about the Skybox project (sanangelo.gov/803/Data-Center-Information).