Texas Gov. Abbott orders audit of state data center interconnection queue and pauses new grid connections amid 474 GW of pending AI data center demand.
Governor Greg Abbott has ordered the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to conduct a comprehensive "verification and audit" of data center projects seeking to connect to the state's electric grid, effectively pausing approvals until the review is complete.
The move follows growing concerns over the scale of data center development in Texas. ERCOT is currently tracking more than 1,800 projects in the queue, representing over 474 gigawatts of electricity, with approximately 90% of the new power requests coming from data centers.
Abbott's directive asks developers to provide information on tax breaks, power use and generation, water use and cooling operations, efforts to reduce impacts on local communities, and ownership of the facility. The review has also put ERCOT's "batch zero" review on pause, though the timeline for the audit remains unclear.
"Our top priority is to protect Texans' safety and quality of life," Abbott said, adding that "Any project that fails to comply with the requirements set forth by the PUCT and ERCOT, and by state law, must be denied connection to the Texas grid." Abbott warned that "unprecedented load growth could endanger the reliability and stability of the Texas electric grid."
The directive follows a PUCT survey measuring water and power usage, which revealed significant compliance issues. Of the 377 companies PUCT staff notified when the survey was launched, only 28 submitted responses. The survey, developed in collaboration with the Texas Water Development Board, collects information about water consumption, cooling systems, water sources, electricity demand, and whether facilities are connected to the state's electric grid or have their own on-site power sources.
Reactions to the pause are mixed. The Data Center Coalition, representing major tech companies, expressed hope that the audit could separate responsible developers from irresponsible ones. "Done correctly, this review can showcase the good actors in the data center industry rather than delaying them unnecessarily," said the coalition's executive vice president of state policy and government affairs, Dan Diorio.
However, Public Citizen's Texas chapter dismissed the directive as a "faux pause" and "so vague that it should be considered meaningless," arguing it "only applies to data center projects seeking connection to the ERCOT grid."
The audit is framed as a response to public backlash over the rapid buildout of data centers across Texas. According to the Texas Tribune, at least 335 data centers are currently operating in the state, with at least 248 more planned.
Perspectives on the impact differ. While some, including analysts at Bernstein, expect most Texas-based Bitcoin miners to be minimally affected, others warn of broader risks. "If even a fraction of those proposed projects come to fruition, they could overwhelm the Texas grid," according to some industry observers.
State law requires the PUCT to share survey data with the water development board and state environmental regulators and to submit a report to the governor and the Legislative Budget Board by the end of the year.