Texas Governor Greg Abbott just told data centers to start paying their own way. On June 10, the Republican governor directed the Texas Public Utility Commission (PUCT) and the Electric Reliability Council of Texas (ERCOT) to “take immediate steps” to protect residential ratepayers from absorbing the infrastructure costs of rapidly expanding data center operations.
The directive mandates that data centers must cover the full costs of their electric infrastructure, with regulators expected to deliver recommendations by July 17, 2026. The PUCT has until July 31 to implement measures for reducing transmission costs.
What Abbott is proposing
The immediate directive targets how data centers connect to and burden the ERCOT grid, particularly in rural areas where new facilities have been popping up at a pace that local infrastructure was never designed to handle.
Abbott has outlined legislative priorities for the 2027 session that would introduce water efficiency mandates, require annual reporting on electricity and water usage, and establish community impact measures addressing noise and physical setbacks from data center facilities.
