Overview
- Chevron and Microsoft announced the 20-year Project Kilby power deal on Monday, formalizing partners, a timeline that targets a final investment decision by the end of 2026, and first power delivery in 2028.
- The facility will be co-located with Microsoft’s data center campus in Pecos, Reeves County, and is planned to scale to roughly 2.0–2.7 gigawatts of dedicated generation on site.
- Most generation will come from GE Vernova gas turbines with additional capacity from Caterpillar’s Solar Turbines, and Chevron plans to use Permian natural gas to fuel the plant.
- Microsoft and Chevron say the project will bring thousands of construction jobs, hundreds of permanent roles, and billions in local and state tax revenue, while critics warn it could produce substantial greenhouse-gas emissions, strain water resources and rely on local incentives.
- The deal marks a broader shift by cloud providers toward on-site, dispatchable fossil-fuel capacity to meet AI reliability needs and leaves key questions to watch: permitting, regulator review of grid and rate impacts, and the companies’ final investment decision later this year.