Fermi, Hillcore Plan 2.6 GW Power Complex for Texas AI Data Center Campus
Fermi and Hillcore Energy Capital have signed a framework agreement for a 2.6 GW behind-the-meter power complex at Project Matador in Carson County, Texas, combining roughly 2.5 GW of gas generation with about 100 MW of solar and battery storage.
Microgrid Media Editorial Desk
Published · 4 min read
Fermi Inc. and Hillcore Energy Capital Corporation announced Aug. 11 a framework agreement for the Fermi Hillcore power complex, an approximately 2.6 GW behind-the-meter energy development planned for Fermi’s Project Matador AI campus in Carson County, Texas. The agreement matters because it would add a large block of dedicated generation to one of the country’s most ambitious data-center power projects as developers increasingly pursue on-site energy to overcome grid-access constraints.
The proposed Hillcore Power Center would include approximately 2.5 GW of natural gas-fired generation developed in phases, along with about 100 MW of solar generation and battery energy storage, according to the Aug. 11 project announcement. The first approximately 350 MW power block is expected to begin construction after definitive agreements are executed, with first power targeted within 24 months of notice to proceed.
The agreement would expand Project Matador’s on-site power pipeline
Under the proposed structure, Hillcore would finance, build, own and operate the power center through a build-own-operate-transfer arrangement. Fermi said the addition could bring the amount of power it expects to market at Project Matador to approximately 4.8 GW over the next 30 months when combined with the company’s main campus power development.
That 4.8 GW figure is a company target rather than operating capacity today. Fermi said more than $1.5 billion has been invested in the broader Project Matador buildout, while the company’s longer-term plans envision an energy portfolio incorporating natural gas, nuclear generation, grid power, solar and battery storage.
The Fermi Hillcore power complex is intended to operate behind the meter, allowing the campus to pair electricity production more directly with the demand of AI and hyperscale computing tenants rather than depending exclusively on new utility-grid capacity.
Fermi Co-President and Chief Operating Officer Jacobo Ortiz described power availability as the key constraint facing AI infrastructure. Under the framework, Hillcore would assume construction, operating and performance risk for its power center, while Fermi would purchase electricity as customer leases are signed.
Hillcore would finance the power center rather than Fermi
The financing structure is a significant component of the announcement. Hillcore and its partners would finance and initially own the facility on their balance sheets, meaning Fermi says it would not need to provide upfront capital for the 2.6 GW development.
Fermi would instead purchase power under arrangements matched to individual tenant leases, with fuel costs passed through. The company would also receive an option to acquire the power center at fair market value after 10 years.
Hillcore President Russell Negus said the company intends to deliver initial power within 24 months of notice to proceed. Hillcore Energy Capital is owned by Hillcore Group and JV Driver Group, according to the announcement.
The companies have not disclosed the expected capital cost of the Hillcore Power Center or a date for completing the definitive agreements. The project also remains subject to customary approvals.
Solar and batteries form a smaller but notable part of the power mix
Natural gas would account for the overwhelming majority of the announced capacity, but the inclusion of approximately 100 MW of solar generation and battery energy storage makes the development relevant to the rapidly evolving role of distributed and behind-the-meter resources in data-center power systems.
Fermi did not disclose how the roughly 100 MW would be divided between solar and battery storage, the battery’s energy capacity in megawatt-hours, its expected duration, or how the storage system would be dispatched.
Those details will determine whether storage primarily supports peak management, power quality, resilience, renewable-energy integration or other campus requirements.
The announcement comes as grid operators and regulators confront rapidly rising electricity demand from data centers. The PJM Board, for example, has directed new actions addressing resource adequacy and large loads, while the Federal Energy Regulatory Commission has also been examining how large-load growth and co-location affect transmission service, reliability and cost allocation.
Project Matador illustrates the shift toward dedicated data-center power
Project Matador is being developed in the Texas Panhandle as a large private-grid and AI infrastructure campus. Fermi says the site is secured or under long-term lease and ultimately could accommodate substantially more power than the capacity covered by the Hillcore agreement.
The project’s strategy reflects a broader challenge for hyperscale computing developers: securing enough electricity on a schedule that matches data-center construction.
FERC has said the U.S. energy system is experiencing demand growth at a pace not seen in a generation, while its recent proceedings have increasingly focused on large loads, co-located generation and transmission access. In June, the commission addressed large-load and co-location issues in proceedings involving regional transmission organizations, including rules affecting high-impact large loads and related transmission processes.
For developers, that environment is increasing the strategic value of generation and storage that can be built at or near computing campuses. Such projects can potentially reduce dependence on the timing of major transmission upgrades, although they introduce their own permitting, fuel, financing and operating requirements.
What happens next
The immediate milestone is the conversion of the framework agreement into definitive agreements. Fermi and Hillcore said construction of the first approximately 350 MW block would begin after those agreements are executed, with first power targeted within 24 months after notice to proceed.
Key details remain unresolved publicly, including the project’s total capital cost, equipment suppliers, construction milestones beyond the first block, the solar-to-storage capacity split and battery duration.
Until definitive agreements and project approvals are completed, the 2.6 GW development and associated timelines should be treated as proposed capacity rather than committed operating generation.
The Microgrid Media Editorial Desk reports on microgrids, energy storage, grid modernization, data center power demand, distributed energy resources, and energy policy. Reporting published under the Editorial Desk byline is developed from primary regulatory records, utility filings, government documents, company disclosures, and independently verifiable sources, and is reviewed under Microgrid Media’s editorial standards.
Editorial oversight: Jonas Muthoni, Editor-in-Chief
