Texas Pauses New Data Center Grid Connections for Statewide Audit

Texas has halted progress on new data center connections to the state power grid while the Public Utility Commission and ERCOT complete a comprehensive audit of every project in the interconnection queue.

Governor Greg Abbott issued the directive earlier this month. The queue holds more than 1,800 requests representing over 474 gigawatts of potential load, roughly five times Texas’s record peak demand. About 90 percent of those requests come from data centers.

The audit requires developers to document projected annual and peak electricity use, dependence on the ERCOT grid, water consumption, ownership details and any reliance on state incentives. Projects that fail to meet the new standards will be denied connection.

ERCOT postponed its scheduled review of the first batch of large-load projects. Regulators expect the process for the initial group of 250 to 300 projects to take several months, with results targeted for early 2027.

Several major operators have already committed to the governor’s standards on cost recovery, water reuse and neighbourhood impact. One project withdrew rather than comply. Local governments across the state have also considered or enacted temporary pauses, though some faced legal challenges.

The move reflects growing concern that rapid data center expansion could raise electricity costs for households and small businesses and strain water resources. Texas had marketed itself as a leading destination for AI infrastructure only months earlier. The pause does not ban data centers outright but ties future growth to verified grid and community effects.