Texas Freezes New Data Center Grid Connections Pending Audit

Texas Governor Greg Abbott has directed state agencies to pause approvals for new data center projects seeking connection to the electric grid until an audit is complete.

In a letter to the Public Utility Commission of Texas and the Electric Reliability Council of Texas, Abbott cited concerns that the surge in proposed electricity demand could threaten grid reliability.

ERCOT is reviewing roughly 474 gigawatts of proposed new load. About 90 percent of the requests come from data centers. That figure is more than five times the state’s record peak demand.

Abbott ordered that any project failing to comply with a verification and audit process must be denied. The goal is to protect reliability and resilience of the Texas electric grid.

The directive follows growing local opposition to data centers over power use, water consumption and neighbourhood impact. New York became the first state to impose a moratorium on large-scale facilities earlier this year.

Since the governor established statewide standards earlier in the summer, several major operators have committed to comply. Those standards require data centers to pay for their own electric infrastructure, conserve water, respect neighbourhoods and avoid shifting costs onto residential customers.

One project that could not meet the requirements chose to end operations before construction began. Other firms have publicly accepted the guardrails.

ERCOT said it would postpone a transmission planning study while it works with the Public Utility Commission to implement the governor’s order.

The pause does not halt existing facilities. It applies to new interconnection requests. How long the audit will take and what criteria will determine approval remain to be detailed by the agencies.

Texas has attracted heavy investment in data centers because of its deregulated power market and available land. The current intervention shows that even in a business-friendly state the scale of demand has forced a recalibration of priorities between growth and grid stability.