Texas orders audits for new data centers before grid connection

Texas Governor Greg Abbott directed the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to audit new data center proposals before they can connect to the state’s power grid. The review is intended to ensure grid stability and reliability, according to Abbott’s directive.

Data centers seeking grid access must provide details on state and local incentives received, projected reliance on the state grid, expected water consumption and sources, and plans to monitor community impacts such as noise. The duration of the audit and its potential to slow development were not specified.

ERCOT is currently evaluating over 474 gigawatts of connection requests, which is more than five times the state’s record peak electricity demand. Data centers account for about 90 percent of these new power requests, reflecting the sector’s rapid expansion in Texas.

Texas is the second-largest data center market in the U.S., behind Virginia, with at least 335 facilities already operating and at least 248 more planned. Some regions, such as El Paso, fall outside ERCOT’s jurisdiction, and certain data centers may opt to generate power on-site instead of relying on the state grid.