ERCOT to audit nearly 300 proposed data centers by the end of 2026, officials say
ERCOT and the Public Utility Commission of Texas are conducting an audit of nearly 300 proposed large data centers across the state, as directed by Gov. Greg Abbott. This audit aims to assess their plans for water and electricity use, tax exemptions, and community impact, with no new approvals granted until completion. The move addresses concerns about the industry's massive electricity demands, which could exceed the state's peak record.
Governor Greg Abbott has directed the Electric Reliability Council of Texas (ERCOT) and the Public Utility Commission of Texas (PUC) to audit approximately 250-300 large data center proposals across Texas. This mandate, issued on August 3, requires developers to provide detailed information on tax exemptions, planned water and electricity usage, measures to mitigate local disturbances, and ownership details. Until the audit is complete, no new data centers will be approved, and facilities failing the audit "must be denied," according to Abbott.
The audit targets facilities expected to use at least 75 megawatts of electricity, with ERCOT also surveying those planning to use 25 megawatts or more to gather community impact data. This directive comes amid rising concerns from residents statewide regarding data centers' environmental impact, including light and noise pollution, water consumption, and potential increases in electricity costs. Officials clarify that the audit primarily focuses on facilities previously identified for ERCOT's "Batch Zero" study, which was postponed due to the new audit.
Chad Seely, ERCOT’s general counsel and chief compliance officer, stated on August 20 that medium-sized data centers not included in the audit are not subject to the same approval halt and can proceed with their local utility interconnection processes. The state is grappling with managing the booming data center industry, projected to see a 142% increase in its share of the market by 2028, with current proposals potentially demanding 200 gigawatts of electricity—more than double Texas’ peak demand record. PUC chairman Thomas Gleeson emphasized the goal is to gather information to inform future decisions.