Texas governor halts new data center grid approvals, orders audit of 474 GW in connection requests

The governor's directive

Texas Governor Greg Abbott on Monday ordered a pause on approvals of new data center projects through the state's grid interconnection process. In a letter to the Public Utility Commission of Texas (PUCT) and grid operator ERCOT, Abbott directed the agencies to conduct a comprehensive audit of all planned data centers seeking connections before any additional facilities are allowed to proceed. The governor's office said ERCOT is currently reviewing more than 474 gigawatts of proposed new electricity demand, more than five times the state's record peak load. Roughly 90% of those requests come from data centers.

“Any data center project that fails to comply with the verification and audit process to protect the reliability and resilience of the Texas electric grid must be denied. Simply put, Texans must come first.”

What developers must disclose

Under the new requirements, developers will have to provide detailed information on expected electricity demand, on-site power generation plans, water consumption and sources, tax incentives or public subsidies received, and ownership structures. They must also explain how they plan to mitigate noise, light pollution, traffic, and other effects on nearby communities. Projects that fail to comply with the requirements set by PUCT and ERCOT, or with state law, will be denied a connection to the grid.

The scale of the queue

The size of ERCOT's interconnection queue has grown dramatically this year. In January, ERCOT had 233 gigawatts of projects waiting to connect to its grid. In less than six months, that figure more than doubled to 474 gigawatts. While many of those proposals are paper projects that may never be built, even a fraction of that demand could place significant pressure on the state's power grid. Texas is already home to at least 335 operating data centers, with at least 248 more planned, making it the second-largest data center market in the country behind Virginia.

Rising opposition and political pressure

Local opposition to data centers has been growing due to their heavy use of energy and water, along with pollution from the power generation needed to run them. A June Reuters/Ipsos poll showed just one-third of Americans approve of the pace of data-center construction. Last month, New York became the first state to impose a moratorium on large-scale data centers. Last week, Texas Lieutenant Governor Dan Patrick joined calls for regulators to deny applications for three 765-kV transmission lines under ERCOT's Permian Basin Reliability Plan, citing objections from rural landowners over the routes.

“If these lines are going to be built, which many believe must be built, then the PUC's transmission approval process must not only prioritize strengthening the grid, but also protect Texas landowners and communities.”

Energy context

Texas has attracted major tech companies including Meta, Amazon, Microsoft, Google, and OpenAI, which are pouring billions into infrastructure for AI models. OpenAI's flagship Stargate data center is located in Abilene. While the state has benefited from ample natural gas reserves and a rapid buildout of wind and solar (utility-scale solar capacity grew fourfold between 2021 and 2025), electricity prices have been rising. Data centers and crypto mining facilities have pushed prices higher, according to the Energy Information Administration. ERCOT said it would postpone a study under a framework approved in June to manage data center power demands while it reviews Abbott's directive.