Governor Greg Abbott has instructed Texas regulators to halt new data center grid connections while authorities review the projects' massive power and water needs.
Under the directive, the Public Utility Commission of Texas (PUCT) and grid operator Electric Reliability Council of Texas (ERCOT) must review all pending applications before granting new permits.
More than 1,800 projects are currently queued for connection, with data centers accounting for about 90 percent of them. ERCOT estimates these facilities could demand up to 474 gigawatts of power, far exceeding the historical peak demand record of the state's power grid.
Developer Requirements and Review Criteria
Developers must now submit detailed information on electricity and water consumption, cooling systems, on-site power generation, tax incentives, property ownership, and local community impact mitigation. Projects that fail to satisfy the standards will be denied network access.
Abbott said the state's priority remains resident safety and energy supply reliability.
The tightened scrutiny follows a recent PUCT inquiry sent to 377 data center construction companies, of which only 28 responded. Authorities determined the low response rate provided insufficient data to assess future grid load and water resource demands.
Exemptions and Industry Impact
The connection pause does not apply to all facilities. Data centers operating outside the ERCOT service area and sites with their own power generation that do not require grid access are exempt from the new rules.
The decision has drawn criticism from politicians, with some describing the measures as too mild and others calling them overdue. Industry observers note the extra verification steps could significantly delay large artificial intelligence data center launches in a sector reliant on rapid power access.
