Texas Freezes Approvals for Hundreds of New Data Center Projects Pending Grid Audit

Texas has paused approvals for new data center projects seeking connection to the state power grid while an audit of planned facilities is completed.

Governor Greg Abbott ordered the Public Utility Commission of Texas and the Electric Reliability Council of Texas to review all projects before any further facilities move forward. ERCOT is examining roughly 474 gigawatts of proposed new electricity demand, more than five times the state’s record peak load. About 90 percent of the requests come from data centers.

Abbott said any project that fails to comply with the verification and audit process to protect grid reliability and resilience must be denied. The directive aims to prevent data centers from shifting costs onto residential and small-business customers or compromising system stability.

Earlier guidelines required data centers to pay for their own electric infrastructure, conserve water, respect neighbourhoods and avoid interference with local quality of life. Several developers have announced compliance; at least one project ended before construction after it could not meet the standards.

ERCOT postponed a related transmission planning study. The pause follows similar concerns in other states. New York imposed a moratorium on large-scale data centers earlier, and local jurisdictions elsewhere have restricted or rejected projects.

The rapid growth of AI-related computing has driven the surge in proposed demand. Texas, with its independent grid and relatively open energy market, has attracted a large share of the planned facilities. The audit is intended to ensure the grid can absorb the load without reliability risks.

Results of the review will determine which projects proceed and under what conditions. The process is expected to run into the coming months.