Texas Governor Greg Abbott has directed state regulators to review pending data center projects seeking connections to the state’s electric grid, a move that effectively halts new developments as demand surges from artificial intelligence and cloud computing infrastructure.
The Public Utility Commission of Texas and ERCOT were instructed to deny grid access to facilities that fail to meet state requirements, according to a statement from ERCOT. The grid operator confirmed the directive has paused all data center projects under review.
ERCOT noted that approximately 90% of the 474 gigawatts of large-load interconnection requests currently under consideration come from data centers, exceeding five times the state’s previous peak demand record. The agency is working with regulators to implement the governor’s orders, including delaying the Batch Zero transmission planning study.
In a statement, Abbott emphasized prioritizing Texans’ safety and quality of life, stating, “Texans must come first.” The review will require companies to provide details on their projected electricity usage, water consumption, and plans for independent power generation.
This action follows Abbott’s recent efforts to tighten oversight of the data center industry, including demands that AI facilities bring their own power, reuse water, and reduce costs for residents. Texas has emerged as a major data center hub due to significant tax incentives, with the state offering over $1 billion annually in breaks for qualifying projects.
Public Utility Commission Chairman Thomas Gleeson confirmed the agency is collaborating with ERCOT to enforce the new requirements. “We appreciate Gov. Abbott’s directive and will continue to work closely with ERCOT to ensure these requirements are fully carried out on behalf of the people of Texas,” he said.
