Powerful Texas Republicans are asking state regulators to pause a $33 billion transmission build-out — a move that could slow efforts to bring a slew of data centers online.
Lt. Gov. Dan Patrick and state Sen. Charles Schwertner called Friday for the Public Utility Commission of Texas to reject pending applications to build extra-high voltage power lines across the state.
Both officials pointed to a 15-hour Texas Senate Business and Commerce Committee hearing Wednesday, where hundreds of landowners from across the state pleaded for relief from data center developments. The meeting was the latest warning sign for Republicans, who face mounting pressure to balance pro-business policies with rural land use concerns.
“It’s clear the overwhelming number of witnesses in rural Texas are not supportive of the current process,” Patrick said in a statement. “They want it paused. Some want it stopped entirely.”
Schwertner and Patrick argued that transmission companies need to go back to the drawing board and that lawmakers must overhaul the process of how long-distance power line projects are approved. Patrick presides over the state Senate, while Schwertner chairs the Business and Commerce Committee.
But pausing the transmission build-out could have a huge impact on data center developers looking to put projects in Texas, which may overtake Virginia as the data center capital of the world in the coming years.
Plans to bring the next wave of data centers online are underpinned by assumptions that new extra-high voltage transmission lines will get built within the timeline approved by the PUC.
“This could throw a massive wrench into the whole works right now,” said Joshua Rhodes, a research scientist focused on energy at the University of Texas, Austin.
The transmission decision will be up to PUC commissioners, all five of whom were appointed by Republican Gov. Greg Abbott. Abbott and Patrick are both up for reelection in November, and the governor has called in recent months for more oversight of data centers.
It’s unclear how Abbott may seek to influence any transmission plans at the PUC. Neither Abbott nor the PUC responded Friday to a request for comment about lawmakers’ calls to pause the transmission projects.
A pause would affect the state’s massive oil and gas industry.
The first of the $33 billion of transmission projects was meant to funnel power to West Texas to help support oil and gas production. The Permian region across Texas and New Mexico accounted for about 44 percent of U.S. oil production and 19 percent of natural gas output last December, according to federal data.
The industry for years has been lobbying Texas to build more transmission lines to the Permian after hydraulic fracturing, or fracking, and other techniques sent production skyrocketing. Electricity is needed for those advanced operations, and data center plans would only add to the power demand in Texas.
“Part of this [problem] is because [transmission] wasn’t built when it was needed,” said Todd Staples, president of the Texas Oil and Gas Association. “No one believed that oil and gas was going to grow 430 percent in production in the Permian Basin since 2015 to 2025.”
‘Not an academic exercise’
State lawmakers passed HB 5066 in 2023, requiring the PUC to develop a reliability plan for the Permian Basin — a plan that must address extending transmission to oil and gas production areas.
The law also requires the PUC to develop reliability plans for any regions with rapid electrical load growth, as determined by transmission service providers.
The Permian Basin Reliability Plan was approved by the PUC in October 2024.
Before HB 5066, ERCOT relied on independent and in-house modeling — along with some data from transmission service providers — to come up with transmission plans.
At Wednesday’s hearing, ERCOT Chief Operating Officer Woody Rickerson said HB 5066 requires the grid manager to rely on transmission companies’ data for the Permian Basin Reliability Plan and other transmission projects.
He said demand forecasts from those providers were “substantially higher” than ERCOT’s in-house forecasts.
Transmission service providers earn a guaranteed rate of return on the transmission projects they build, and the bigger and more expensive a project is, the more profit they make.
In response to questions from POLITICO, ERCOT spokesperson Trudi Webster said the grid operator “stands behind its planning analysis to reliably serve the future of the Permian Basin.”
Rickerson said West Texas needs the transmission lines laid out in the Permian Basin Reliability Plan to avoid power shortages.
“With or without [HB] 5066 … [the proposed transmission] lines are necessary for the stability of the grid, reliability of the grid and supplying West Texas,” Rickerson said.
In a statement, the Association of Electric Companies of Texas said it continues “to support the development of much-needed electric infrastructure to support Texas’ growing population, as well as our economic demand.”
Staples with the Texas Oil and Gas Association said Wednesday that the industry will struggle to keep production high if the power lines aren’t built.
“This is not an academic exercise,” he said. “These are real people with a real crisis that is occurring that we have to fix.”
Still, the Permian Basin is just part of the $33 billion transmission build-out.
Using demand forecast data from transmission providers, ERCOT determined more transmission would be needed in East Texas. Ultimately, the PUC approved the Strategic Transmission Expansion Plan that envisions new transmission lines built from northeast Texas to just north of Corpus Christi.
The so-called STEP program within Texas also connects certain eastern transmission projects to Central Texas and the Permian Basin lines with even more transmission.
“Now, it’s not just the Permian reliability plan — it’s all over Texas,” said state Sen. Kevin Sparks, a Republican from the Permian region, at Wednesday’s meeting. “It’s coming to a city near you if it hasn’t affected you yet.”
‘I’m very disappointed’
The Permian Basin reliability plans are the first transmission projects to start the siting process under the state’s new power line push. And that process has infuriated rural landowners near their paths.
Part of their frustration stems from HB 5066, which also cut the timelines for the PUC to approve or deny transmission project from one year to 180 days. That gives landowners less time to argue for other routes that would bypass their land.
More than 200 people spoke out against the process to fight the transmission lines at Wednesday’s hearing in Austin, Texas, including country music legend Tanya Tucker. She belted out the chorus of her 1978 hit “Texas (When I Die).”
“I’m very disappointed in how this has been handled,” Tucker said. “This isn’t the way we do things in Texas. You don’t rush in and turn someone’s life upside down.”
The pushback against the lines has been so intense that multiple senators at Wednesday’s hearing called for stopping the build-out until the state Legislature can weigh in on the issue.
The PUC delayed a vote on one of the transmission lines in June. Chair Thomas Gleeson said the commission should consider consolidating Permian Basin Reliability Plan projects and deciding whether to approve them all at once.
“I want to be mindful of the decisions we’re making,” Gleeson said at a PUC meeting in June.
But if the PUC did tell transmission companies to go back to the drawing board, it could jeopardize data center growth.
Since late December 2025, ERCOT has been making plans to try to allow waves of data centers to come onto the grid.
Projects in that first wave — known as Batch Zero — are set to get their power allocations from ERCOT in April. ERCOT estimates at least 65 gigawatts worth of data center projects will be in Batch Zero, and they’ll get power based on the generation and transmission that’s been planned for the grid between now and 2032.
But ERCOT’s Webster told POLITICO the grid operator’s outlook assumes all of the transmission projects in the Permian Basin Reliability Plan and the STEP program are built within the timeline approved by the PUC.
If major power lines are pushed back, that could delay when the data centers in Batch Zero could come online.
It could take months for the fight to play out if the PUC were to deny the current transmission applications while telling transmission companies to rework their routes, said Rhodes with the University of Texas.
“They’ll probably argue about it all legislative session,” Rhodes said. “It could be a very big deal because it could delay it just a few months but it could delay it indefinitely. It could be death by a thousand cuts and they don’t get built, and we lose the ability to modernize the grid.”
