Governor Greg Abbott has halted the approval process for new data centers that aim to connect to the electric grid managed by ERCOT, instructing state regulators to conduct audits of these projects first.
This directive was issued on August 3 in a letter to the Public Utility Commission of Texas and ERCOT. Until the audits are completed, new projects will not be able to proceed through the interconnection process.
Currently, ERCOT is monitoring over 1,800 projects in its interconnection queue, which collectively represent more than 474 gigawatts of requested capacity—significantly exceeding the grid's peak demand record. Abbott noted that approximately 90 percent of these requests are from data centers, with the queue doubling from 233 gigawatts in January.
The pause is particularly impactful for the Dallas-Fort Worth area, recognized as the second largest data center market in the nation. Texas is projected to potentially surpass Northern Virginia, the current largest market, by 2030. In total, at least 248 data center projects are planned statewide, with North Texas hosting 26 large campuses across various locations.
The required audits will gather detailed information on electricity needs, water usage, on-site power generation, noise and light controls, tax incentives, ownership structures, and the potential impact on nearby communities. Abbott's office had previously requested some of this data voluntarily, but many operators did not respond, leading to this mandatory requirement.
Notably, the directive pertains to projects connecting to the ERCOT grid, while some developers are constructing their own on-site generation systems that do not require traditional grid connections. No timeline for the completion of the audits has been provided.
