New data centers in Texas have been put on hold in a striking reversal by Republican Gov. Greg Abbott, who is up for reelection in November.
Abbott on Monday directed the state’s power regulators and main grid managers to audit data centers seeking to connect to the Texas grid, saying no more additional data centers can be approved or move forward until that process is over.
In a letter to the state Public Utility Commission and the Electric Reliability Council of Texas, Abbott wrote that the agencies need to collect more information to keep the state’s grid stable.
“Any project that fails to comply with the requirements set forth by the PUC and ERCOT, and by state law, must be denied connection to the Texas grid,” Abbott said. “Simply put, Texans must come first.”
Abbott’s letter called for an audit that would require data centers to report to ERCOT and the PUC information about their proposed water use, tax breaks they receive, what cooling technologies they’re using and who owns the projects.
The pause throws a wrench in ERCOT’s plans to bring data centers online in the state’s main power grid, which is largely isolated from the rest of the country. It also represents a major shift from last year, when Abbott called Texas the “epicenter” of artificial intelligence development as he courted megaprojects. He also called for more oversight back in June.
Abbott has seen support erode over concerns about data centers and extra-high-voltage transmission lines being built in rural areas.
Texas has not elected a Democratic governor in more than 35 years. But a Fox News poll released last week showed him leading Democratic challenger state Rep. Gina Hinojosa by only 1 percentage point, and other polls show Texas voters are firmly against data centers being built in their communities.
Monday’s letter throws a massive wrench into ERCOT’s plans to bring data centers online. ERCOT is working to bring data centers on to the grid in groups, the first of which is known as Batch Zero.
ERCOT had planned to notify data centers about whether they qualify for Batch Zero this Friday and to provide them with power allocation amounts by spring 2027.
Data center developers have been eager to get into Batch Zero because those projects could get most of the power that’s available on the grid between now and 2032. Projects that are part of later batches may need to wait years for more transmission to be built.
ERCOT officials said Monday they were “postponing” the Batch Zero study process due to Abbott’s letter and were working with the PUC to implement Abbott’s directive.
