Texas spent years selling itself as the easiest place in America to build a data centre. This week it started making that harder. Governor Greg Abbott, who last year called the state the “epicenter of AI development,” has ordered a pause on new data-centre connections to the power grid. Regulators must audit every project in the queue first.
The number that forced his hand is stark. ERCOT, which runs most of the Texas grid, is sitting on about 474 gigawatts of requests to connect, more than five times the state’s record peak demand. Roughly 90% of that comes from data centres. In a directive to regulators, Abbott said the load growth “could endanger the reliability and stability of the Texas electric grid.”
What the audit demands
The review asks for the things nobody in the state could pin down before. Each project must disclose the tax breaks it has taken, how much it will lean on the grid, its water use and cooling, its plans to limit noise and traffic, and who owns it. Any project that fails the audit “must be denied,” the letter says.
Abbott tied the move to data centres ducking an earlier survey on water and power. Of 377 companies the utility commission asked, 28 responded, according to The Texas Tribune. Texas is the second-largest data-centre market in the country behind Virginia, with hundreds operating and hundreds more planned. In response to the order, ERCOT paused its own review of the first batch of projects.
