Texas Governor Abbott orders comprehensive audit of all pending data center projects and halts new power grid connections until completion

Governor Greg Abbott has directed state regulators to pause new data centers' connections to the Texas power grid pending a comprehensive audit of their energy and water usage. In a letter to the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT), Abbott instructed the agencies to collect detailed information on water and power consumption before allowing additional facilities to connect.

"Our top priority is to protect Texans' safety and quality of life," Abbott said in the letter. "That includes providing affordable energy, maintaining a reliable electric grid, preserving water for our communities, and championing Texas values. Those priorities can, and must, be achieved while also creating the jobs and providing the economic opportunity that comes with our national leadership in technological innovation and investment."

The directive reflects mounting pressure over data center expansion in Texas. Large energy consumers are currently requesting 474 gigawatts of power—more than five times the electricity used to power the entire state during record-breaking demand. Data centers account for approximately 90 percent of those requests.

This latest action follows earlier summer directives requiring data centers to lower residents' energy bills and pay for electric infrastructure costs. Abbott also instructed PUCT and ERCOT to review their regulatory authority to "identify actions that can be taken under those authorities to safeguard Texans, their property, and resources."

Abbott's directive requires PUCT and ERCOT to collect the following information for all new data centers seeking grid connection:

• Financing details, including government funding and tax incentives

• Projected power usage and measures to reduce reliance on the Texas grid, such as on-site electric plants

• Water usage and cooling strategies that minimize dependence on local water sources

• Community impact mitigation efforts, including noise mitigation, light controls, setbacks, traffic improvements, emergency response coordination, and other protections

• Ownership details and controlling interests

PUCT and ERCOT recently established a new approval process for large energy consumers, including data centers. The agencies had begun evaluating the first cohort of applicants under these new standards in a study known as "Batch Zero," which would determine power allocation per project. That study is now on hold.

"ERCOT is reviewing Governor Abbott's letter concerning data centers and will work with the Public Utility Commission of Texas to implement the Governor's directive, including postponement of the Batch Zero transmission planning study," ERCOT spokesperson Trudi Webster said.

PUCT Chairman Thomas Gleeson acknowledged the directive and committed to implementation. "We appreciate Gov. Abbott's directive and will continue to work closely with ERCOT to ensure these requirements, along with those laid out in our July 17, 2026 letter to Gov. Abbott, are fully carried out on behalf of the people of Texas," he said.

Data centers have drawn increasingly bipartisan scrutiny in Texas. State lawmakers have questioned tax incentives for these facilities, and legislators have criticized data centers for failing to respond to surveys on water usage. The issue has become a campaign flashpoint. Texas Agriculture Commissioner Sid Miller, a Republican, recently criticized Abbott for accepting campaign contributions from data centers and called for the funds to be returned. Abbott's campaign did not immediately respond to a request for comment. The governor had endorsed Miller's opponent in the recent primary.

Democratic gubernatorial candidate Gina Hinojosa criticized the directive as inadequate. "This is the same governor who spent recent months branding Texas the 'epicenter' of AI development and championing the industry his giveaway attracted," she said. "This is the Greg Abbott Corruption Tax in action: rig the deal for global corporations and his donors, send the bill to Texans, and put his own appointees in charge of the cover story when the public catches on."