Governor Greg Abbott has instructed state regulators to pause approvals for new data center projects that seek grid connections, ordering an audit of all planned facilities before additional permits are granted. The directive, delivered in a letter sent Monday to the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT), cites concerns that a rapid uptick in electricity demand could jeopardize the reliability of the Texas electric grid at a time when opposition to the facilities is mounting.
In his letter the governor demanded tighter verification and an audit process. "Any data center project that fails to comply with the verification and audit process to protect the reliability and resilience of the Texas electric grid must be denied," Abbott wrote. "Simply put, Texans must come first."
Texas is on track to become one of the world's largest data center regions, with industry forecasts cited in the directive indicating it could overtake Virginia by 2030 due to abundant land, available energy supplies and a business-friendly policy environment. The governor's move, however, reflects growing unease at the local and political level about the environmental and infrastructure impacts of rapid data center expansion.
Officials point to the scale of proposed new demand: ERCOT is currently reviewing roughly 474 gigawatts of proposed additional electricity demand, a figure that exceeds the state's historical peak demand by more than five times. According to the governor's letter, around 90% of those interconnection requests originate from data centers.
As part of the audit and verification requirements, developers must provide detailed information regarding expected power demand, water consumption, tax incentives tied to projects, ownership structures and measures intended to lessen local impacts. The governor's directive explicitly conditions further approvals on compliance with those verification steps.
Political pressure has intensified. A June Reuters/Ipsos poll referenced in materials accompanying the directive found that only about one-third of Americans approve of the current pace of data center construction. At the state level, Texas Lieutenant Governor Dan Patrick recently urged regulators to deny applications for three proposed 765-kilovolt transmission lines contained in ERCOT's Permian Basin Reliability Plan, citing objections from rural landowners to the proposed routes. In a post on X, Patrick wrote that if the lines are to be built, the transmission approval process must prioritize strengthening the grid while protecting Texas landowners and communities.
In response to the governor's letter, ERCOT said it would review the communication and work with the Public Utility Commission to implement the directive, including postponing a planning study known as the Batch Zero transmission planning study. "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," the grid operator said in an emailed statement.
The Public Utility Commission expressed appreciation for the governor's direction and said it would cooperate with ERCOT to ensure the new requirements are carried out in full. The pause and audit will affect the current pipeline of interconnection requests and could change the timetable on planned projects pending developers' submission of the additional information required by the state.
How long the audit and verification process will take, and what standards will be applied in practice, were not specified in the directive beyond the categories of information developers must supply. The immediate effect, however, is a halt to approvals through the state's grid interconnection process until the audit is completed and the agencies decide how to proceed.