Gov. Greg Abbott has ordered state regulators to conduct a comprehensive verification and audit of all data centers advancing through the interconnection process before any additional projects are approved. Abbott said projects that fail to comply with state requirements, or with state law, must be denied connection to the Texas grid.
The Monday letter, addressed to the leaders of the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT), cited “the failure of some data centers to comply with the PUC’s survey measuring water and power usage” as a reason for the new order.
“[ERCOT] is currently considering approximately 474 gigawatts of requests to connect to the Texas grid. That is more than five times Texas’ record peak electricity demand for ERCOT. Approximately 90 percent of the new power requests are data centers,” noted Abbott.
For comparison, 1 gigawatt can power as many as 750,000 households.
PUCT and ERCOT must also obtain additional information about each project, including the extent to which data centers are paying for themselves, providing their own power, utilizing their own water, and reducing impacts on neighboring properties.
The audit order comes after Abbott sent a letter in June directing the PUCT and ERCOT to “ensure everyday Texans are not burdened with the costs of infrastructure driven by data center expansion, and … residential electric bills are not negatively affected.”
In the same letter, Abbott also pledged to work with the Texas Legislature to ensure data centers’ power, water, and financial stresses—as well as “impacts on local communities”—are reduced for Texas residents.
Texas Railroad Commissioner Wayne Christian “applauded” Abbott’s order for an audit, stating that “no data center project should come at the expense of grid reliability or Texas’ natural resources.”
“We need a Texas plan for data centers, and that starts with getting the facts straight. We cannot manage what we have not measured,” stated Christian. “The information gathered through this process will give regulators and policymakers the tools they need to develop a Texas plan that keeps our state at the forefront of technological innovation while ensuring growth, accountability, and transparency.”
Texas has previously been ranked second in the nation for data center inventory. Recent polling has indicated that Texans oppose the construction of a data center in their community.
Abbott, who once championed the state as the “epicenter of AI development,” has recently called for reevaluating where data center projects are placed.
“Simply put, Texans must come first,” Abbott wrote in Monday’s letter.
