Abbott orders audit of proposed data centers
Governor Greg Abbott has ordered a comprehensive audit for all data center projects seeking access to the Texas electric grid. This audit, to be conducted by the PUCT and ERCOT, will verify compliance, assess electricity and water usage, and evaluate community impact. Projects failing to meet state requirements will be denied grid access, prioritizing grid reliability and Texans' quality of life.
Texas Governor Greg Abbott has issued a directive mandating a comprehensive audit for all data center projects that seek to connect to the state's electric grid. The Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) are tasked with verifying information submitted by these projects, ensuring compliance with state law and agency requirements. Governor Abbott stated that projects failing to meet these criteria will be denied grid access, emphasizing the priority of protecting Texans' safety and quality of life.
The audit comes as ERCOT faces requests for 474 gigawatts of new grid connections, more than five times the state's record peak electricity demand, with data centers accounting for approximately 90% of this proposed demand. The governor's office views this unprecedented request volume as a potential threat to the electric grid's reliability and stability.
Under the new directive, data center developers must disclose all state and local tax incentives or public financial assistance received, along with projected annual and peak electricity usage. They are also required to detail plans for onsite power generation or other measures to reduce demand on the ERCOT grid. Furthermore, the audit will scrutinize each project's expected water consumption, its source, and the cooling technologies planned, such as air cooling or closed-loop systems. Developers must also outline steps to mitigate impacts on local landowners and communities, including noise and light controls, setbacks, traffic improvements, and coordination with emergency responders. Project ownership and controlling interests must also be disclosed.
This audit builds on an earlier directive from Governor Abbott that required data centers to bear the costs of electric infrastructure for their operations, preventing these expenses from being passed to residential customers. The Texas Farm Bureau, which had previously advocated to Lt. Gov. Dan Patrick and House Speaker Dustin Burrows for a balanced approach to data center expansion, commended the governor's call for more information, underscoring the importance of protecting agricultural resources and rural communities.