The Valley Adopted a Data Center Deal Template. It Assumes Gas Generators Running 24/7.
The Rio Grande Valley now has a regional playbook for negotiating with AI data center developers. What the playbook actually commits anyone to is a different question.
On Oct. 28, the Lower Rio Grande Valley Development Council's board of directors took up an action item to approve a "Community Benefit Agreement (CBA) Term Sheet Template" for artificial intelligence and hyperscale data center projects, according to the meeting agenda and board packet. The Rio Grande Guardian reported the board approved it unanimously.
The LRGVDC is the council of governments for Cameron, Hidalgo and Willacy counties. The term sheet itself was drafted by the RGV Broadband Coalition, a group led by Connect Humanity, with input from community workshops held this year. Coalition leaders and LRGVDC staff have described it as a tool cities and counties can use when a data center developer comes knocking.
The 956 Report obtained the full eight-page term sheet from the Oct. 28 board packet, a public document posted on the LRGVDC website. Here is what it says, what it does not say, and why the air in this region makes the gaps matter.
WHAT THE BOARD APPROVED
The document is titled "Texas Rio Grande Valley AI Data Center Community Benefit Agreement Term Sheet Draft, Fall 2026." It is a template, not a contract. No developer has signed it, and no city or county is bound by it.
It is organized into five sections: energy, water and wildlife resources; workforce development; closing the digital divide; telehealth and healthcare; and governance and accountability.
Some of its asks are concrete. Developers building long-haul fiber to a data center would be asked to lay a second conduit along the same route, a "dig once" approach, so regional internet providers could lease it to serve colonias and rural areas within at least a 10-mile radius at a minimum of 100/100 Mbps. Developers would conduct a wildlife impact study, including dark-sky lighting to protect migratory birds. The document suggests a contribution of $5 million at signing and 2 percent of annual revenue into a community endowment held by a local foundation.
But nearly every commitment that could be measured is left blank. The local hiring percentage reads "[number] percent." So do permanent local jobs, the buy-local share, paid internships, apprenticeships and donated server space. Even the $5 million and 2 percent appear in brackets, meaning they are suggestions for negotiators, not fixed terms.
That is how templates work. It also means no resident in the Valley is owed anything until a specific city or county negotiates and signs an agreement with a specific company.
WHAT THE DOCUMENT DOES NOT CONTAIN
A review of the full text found no penalties for missed commitments, no clawback provisions, no performance bond, no dispute-resolution process and no termination terms.
That matters because the coalition set a higher bar for itself. Its Sept. 29 workshop presentation to the LRGVDC's Economic Development Advisory Committee listed five principles for the agreement, including "Enforceable. CBA Binding commitments, not aspirations," along with no NDAs, bilingual documents and binational provisions for Mexican border communities. None of those four principles appears in the text of the term sheet the board approved.
There is also no cap on water use. Some coverage of the vote described the agreement as imposing usage caps. The water section of the term sheet instead says a data center's consumption "shall not come at the expense of water reserves," requires closed-loop cooling, and asks developers to help finance new water sources such as desalination. It sets no gallon limit and no reporting requirement.
To be fair to the drafters, a template is meant to be filled in, and the document tells negotiators to "be specific" and decide their walk-away point before sitting down with a developer. Notes to negotiators also advise local officials to find out who actually owns a proposed data center and who its tenants will be, a real concern when projects arrive under shell-company names.
The question is whether local officials, facing billion-dollar developers and the promise of new tax base, will fill in those blanks with hard numbers.
THE PART ABOUT THE AIR
The most revealing line in the document may be in its opening paragraphs.
The term sheet describes a data center expected to draw its power from "a fleet of [Number] onsite gas generators operating 24/7/365 days per year," backed up by "a fleet of [Number] onsite emergency diesel generators," until the local utility can supply enough electricity.
In other words, the region's own negotiating template assumes that a hyperscale data center arriving in the Valley may effectively bring its own power plant.
The term sheet does try to address that. It requires that the gas and diesel generators be permitted with the Texas Commission on Environmental Quality under the same address, so their emissions are evaluated as coming from a single location. That provision appears designed to prevent a project from spreading generators across separate permits, which can keep each piece below the thresholds that trigger stricter review. It is one of the strongest provisions in the document.
Other air provisions are thinner.
The template says the gas generators are temporary and will be removed once the utility can provide service. It sets no deadline.
It requires "emissions technology that captures hazardous air emissions," but names no pollutants, no emission limits and no specific control equipment. Gas-fired generators are a source of nitrogen oxides, which contribute to ozone formation, along with fine particles. Diesel backup generators emit fine particulate matter.
And while the document acknowledges that TCEQ and local governments are legally responsible for monitoring and enforcing emissions, its solution is to "support a local watchdog group" of nonprofits or students to track emissions, which it suggests could double as a hands-on science program for youth.
At the same Oct. 28 meeting, an LRGVDC staff report noted that the council is working to install two new air monitoring stations, one with the City of San Benito and one with the Delta Lake Irrigation District, under a TCEQ project. Whether those monitors will be anywhere near future data center sites is a question worth asking.
Because the Valley is not starting from clean air.
In its 2026 "State of the Air" report, the American Lung Association ranked the Brownsville-Harlingen-Raymondville metro area the second-worst in the nation for year-round particle pollution, based on monitoring data from 2022 through 2024. Cameron County received a failing grade. The same report ranked the metro fourth-worst in the country for short-term particle pollution, with an average of 23.7 unhealthy days per year. One year earlier, the metro ranked 16th for year-round particle pollution.
Those rankings reflect the air before a single hyperscale data center has been built in the Valley, and before the region's next wave of heavy industry comes fully online.
Fine particle pollution is the kind small enough to lodge deep in the lungs and enter the bloodstream. The lung association's report does not identify the sources behind Cameron County's numbers, and the region's particle pollution likely comes from many places at once, on both sides of the border.
That is exactly why the term sheet's approach to air deserves scrutiny. It evaluates each data center on its own, with no requirement to consider what is already in the air. A community that ranks second in the nation for year-round particle pollution does not have much room left to give.
WHAT COMES NEXT
LRGVDC and the RGV Broadband Coalition have said they plan to meet with mayors, county judges and city commissioners across the region to help customize the template.
The real test will come with the first live project. Data center proposals are already in motion near Harlingen. Whether any city or county uses this template, and whether any developer agrees to negotiate under it, has not been reported.
Until then, the Valley has a promise on paper. Residents who care about what they breathe may want to ask their local officials a simple question before any deal is signed: What number goes in the blank?
Sources:
LRGVDC Board of Directors Agenda and Meeting Packet, Oct. 28, 2026 (lrgvdc.org/meetings.html)
RGV Broadband Coalition, Workshop 3 presentation, Sept. 29, 2026
Rio Grande Guardian, Oct. 30, 2026
American Lung Association, "State of the Air" 2026 and 2025, Brownsville-Harlingen-Raymondville releases
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