Texas pauses new data center approvals pending grid and resource audits

Texas Governor Greg Abbott ordered that all new data center projects must undergo audits by the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT). The move follows rapid growth in data center proposals, which have overwhelmed ERCOT’s interconnection queue. In January, ERCOT reported 233 gigawatts of projects waiting to connect to its grid; by August, that figure had more than doubled to 474 gigawatts. The grid operator estimates that about 90% of the pending requests are for data centers.

The governor’s directive requires developers to provide detailed information about proposed projects, including on- and off-site electricity and water demand, noise-mitigation efforts, light controls, use of tax incentives, and ownership details. Abbott had previously attempted to gather this information through a voluntary survey, but most operators did not respond, prompting stricter oversight.

The surge in data center proposals has raised concerns about grid capacity and electricity prices. ERCOT’s interconnection queue now represents more than five times the grid’s total peak demand, and data centers and crypto-mining facilities have contributed to rising prices. While Texas has benefited from abundant natural gas reserves and growth in utility-scale solar capacity, the rapid expansion of data centers has strained resources.

Historically, Texas has maintained a business-friendly regulatory environment, with minimal zoning and light-touch oversight compared to other states. However, the governor’s decision to mandate audits reflects growing unease over the impact of data centers on the state’s infrastructure and resources. The outcome of these audits could reshape Texas’ appeal as a hub for data center development.