The U.S. Army is proposing to develop a hyperscale data center at Fort Bliss that would draw 3 gigawatts of electricity — more than the peak demand of every El Paso Electric customer combined — even as local utilities and city leaders say they have been given few details about how the facility would be powered, cooled, or integrated into the region’s strained water and electric grids.
David Fitzgerald, deputy undersecretary of the Army, briefed reporters on April 22 that the service is “targeting an initial operating capacity of about 100 megawatts on the compute side” by next year and full 3-gigawatt demand by 2029. By comparison, El Paso Electric’s entire generation capacity across a service territory stretching from Hatch, New Mexico, to Van Horn, Texas, is about 2.9 gigawatts, and the highest customer demand the utility has ever recorded — during the summer of 2023 — was just over 2.3 gigawatts.
A military priority
“The state of modern warfare and future warfare is largely going to depend on the ability to capture, process and utilize massive amounts of data,” Fitzgerald said, describing the project as “a strategic priority, not just for the Army, but for the entire Department of War.” The data center is one of several the Defense Department is pursuing under Trump administration executive orders that seek to accelerate permitting and development of AI infrastructure.
The publicly traded investment firm Carlyle Group, which manages $477 billion in assets and posted nearly $1.7 billion in distributable earnings in 2025, would finance and operate the facility under an enhanced-use lease that allows the military to rent under-used land to private entities. Carlyle would use the majority of the data center’s capacity for its own business, while the Army would access a secure portion for military computing — from targeted-drone warfare to housing the cloud database that tracks soldiers’ pay and entitlements.
Maj. Gen. Curtis Taylor, commanding general of the 1st Armored Division and Fort Bliss, said data centers are “essential parts of power projection.” He added: “But we have to protect those servers. And that’s why there’s great utility in building that infrastructure on military installations.” The Fort Bliss site would sit on a plot near Loop 375 and Montana Avenue — just east of the Camp East Montana immigrant detention facility and near El Paso Electric’s gas-fired Montana power station.
No formal requests to utilities
Neither El Paso Electric nor the municipal water utility has received a formal service request from the Army.
“EPWater was just recently brought into the discussion, and we only have preliminary information,” El Paso Water said in a statement. The utility noted that Fort Bliss Water currently supplies the installation, though El Paso Water can provide backup service. “The construction and water use would be entirely on federal property.”
El Paso Electric said it is “uncertain whether the data center will connect to the utility’s power grid and will figure that out in the future.” The Army “confirmed that questions regarding the power source and whether it will be connected to the regional grid remain under review,” the utility said.
Fitzgerald acknowledged public concern about groundwater drawdown — the solicitation issued by the Army itself describes El Paso’s water risk as “extremely high” and notes that most of Fort Bliss’s water comes from on-base wells tapping the Hueco Bolson aquifer, the city’s main water source. Fitzgerald said the facility would be “water neutral,” but neither El Paso Water nor the Army has explained how water consumption for cooling computer servers would be offset. El Paso Water said it has “no details about how the data center facility could achieve water neutrality.”
Gas turbines and emissions
Jeff Waksman, an assistant secretary of the Army, said combined-cycle natural gas turbines are the “most likely” power source. A plant sized for a 3-gigawatt data center would generate substantial greenhouse gas emissions and other pollutants including particulate matter in a central El Paso location, though Waksman said environmental review would occur before construction begins.
It is also not clear who would build the generation. “We have to decide whether El Paso Electric is going to be the ones building whatever is coming, or if this is going to be some independent power producer,” Waksman said. The utility is already planning a 366-megawatt gas-generator plant for Meta’s nearby data center, while Oracle said its Project Jupiter campus in New Mexico would be powered by 2.45 gigawatts of Bloom Energy fuel cells.
Community input and timeline
Army officials confirmed they have not asked El Paso residents whether they support the project. “What we’re trying to do is find where are the common interests, common ground that we can solve for,” Fitzgerald said. He added that “there are always elements that will kind of make this an ‘us versus them’ sort of construct, but I don’t think we view it that way from the Army. I think there’s a path here that will benefit not just the installation, but the community as well.”
The timeline is tight. Fitzgerald said the “ideal endstate” is operation by late 2027, “which is moving pretty quick,” meaning construction must “begin in the not-so-distant future.” A Carlyle Group representative at a recent community meeting declined to answer questions or provide project details, and the firm did not respond to a request for comment.
Tax uncertainty
The enhanced-use lease structure creates uncertainty around taxation. Land on federal installations is generally not subject to state or local taxes, but the authorizing statute says a lessee’s interest “may be taxed by State or local governments.” Whether the data center buildings — potentially owned by Carlyle or the Army depending on final deal structure — would be subject to El Paso property taxes remains unresolved.
A wider rollout
The Fort Bliss project is one piece of a multi-base push. The Army is developing a similar data center at Dugway, Utah, and has identified Fort Hood in Texas and Fort Bragg in North Carolina as potential sites. The Air Force issued a solicitation in October accepting proposals for AI data centers on unused land at bases in California, Georgia, Arizona, and Tennessee. The Hanwha Defense USA munitions factory awarded in January at Pine Bluff, Arkansas, was structured under the same enhanced-use lease authority the Army intends to use at Fort Bliss.
This story was originally reported by Diego Mendoza-Moyers for El Paso Matters and distributed through a partnership with The Associated Press.