Texas energy agencies respond to the governor's data center directive by requesting expanded authority from state lawmakers to fast-track grid interconnections.

Texas' power grid operators are calling for state lawmakers to expand their authority to regulate data centers, following a recent directive from Governor Greg Abbott to rein in these facilities.

In a letter last month, Abbott directed the Public Utility Commission of Texas (PUCT) to take action ensuring that data centers lower residents' energy bills when connecting to the grid and requiring the facilities to pay for their electric infrastructure costs. He also directed both the PUCT and the Electric Reliability Council of Texas (ERCOT), which operates the state's electricity grid, to review their authority and "identify actions that can be taken under those authorities to safeguard Texans, their property, and resources."

PUCT Chairman Thomas Gleeson responded this month, outlining steps the two agencies had already undertaken—most initiated before the governor's directive in response to a state law passed in the 2025 legislative session. Gleeson said the PUCT and ERCOT have adopted new requirements for data centers seeking to join the grid and taken steps to ensure existing power plants continue serving everyday Texans alongside powering new data center facilities. The agencies have also assessed how transmission costs are distributed among consumers and improved their forecasting processes for grid energy needs.

Both agencies are working to ensure that data centers and other large energy consumers pay for the cost of building new infrastructure required to connect to the grid. Gleeson said they are also developing a program to encourage data centers to reduce energy consumption ahead of "an anticipated electric energy emergency."

In his letter, Gleeson proposed state legislation to strengthen regulatory authority. He said regulators should be able to communicate directly with data centers to request energy conservation during emergencies—currently, ERCOT must communicate through the data center's utility company instead. Gleeson also recommended requiring data centers and other large energy consumers to register with the state, and compelling them to comply with the Lone Star Infrastructure Protection Act, an existing law that "prohibits agreements that would give certain foreign-linked companies direct or remote access to, or control over, Texas critical infrastructure." This law presently applies only to power plants and transmission companies.

"Texas should welcome responsible economic development, but it must do so in a manner that prioritizes affordability, reliability, and the interests of the residents who depend on the grid," Gleeson wrote.

University of Texas energy researcher Joshua Rhodes noted that data centers are likely to be central to the next legislative session. "Data centers are not polling very favorably in public opinion, and so it'll be an indication that there will be some bills trying to inject some discipline into this market," he said. While there has been substantial discussion about preventing data centers from passing infrastructure costs to consumers, state regulators are still developing concrete policies. "Really, the thing that feels kind of new and feels like it's not fully resolved yet is the concept of how these large consumers of electricity are going to pay for infrastructure that they need, such that it doesn't fall on other folks," Rhodes explained.