Texas Freezes New Data Centre Connections Until December Audit

Texas will not approve large new data centre connections to the grid until mid-December. Grid operator ERCOT said on August 24 that it must first complete an audit ordered by Governor Greg Abbott of the first 300 projects in its Batch Zero queue.

About 90 percent of those projects are data centres. Overall, ERCOT is reviewing roughly 474 gigawatts of proposed new demand, more than five times the state's record peak load. Abbott directed the Public Utility Commission and ERCOT in early August to pause approvals and verify that each facility can connect without threatening reliability.

Any project that fails to respond or fails the verification will be disqualified. No large data centre is expected to come online before the November midterm elections. The pause follows similar restrictions in New York and growing local opposition in several states over water use, land and electricity prices.

Texas has attracted heavy investment because of its deregulated market and available land. The sudden scale of interconnection requests has raised concerns that the grid could face shortages during summer peaks or extreme weather. ERCOT postponed a transmission planning study while it carries out the governor's directive.

The outcome of the audit will decide which projects proceed and under what conditions. Power prices, industrial users and the broader AI infrastructure build-out all depend on how strictly regulators apply the new filters.