Abbott halts data center approvals pending audits, but Panhandle data centers will not be affected

Texas Governor Greg Abbott has issued a directive ordering the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to audit all data centers currently seeking interconnection to the ERCOT grid. This executive order effectively pauses the approval process for these facilities, with the aim of defining new interconnection requirements. The audit will collect detailed information, including data centers' reliance on state financial assistance, their self-sufficiency in power and water, measures to mitigate community impacts, and project ownership details.

Notably, data centers located in the Texas Panhandle, which utilize the Southwest Power Pool (SPP) rather than ERCOT for their power grid connections, will not be affected by this statewide directive. Fermi America is cited as an example, having an agreement with Xcel Energy for up to 200 megawatts of electricity within the Panhandle. SPP manages large load requests through its Conditional High Impact Large Load service, offering conditional grid access within 90 days.

This new policy builds upon Governor Abbott's previous communication to PUCT chairman Thomas Gleeson, which called for actions to reduce residential ratepayer transmission costs and ensure data centers bear all their electric infrastructure costs. Texas is currently the second-largest data center market in the U.S., and ERCOT is reviewing 474 gigawatts of power requests, 90% of which originate from data centers, exceeding the state's peak electricity demand by over five times. Governor Abbott underscored his commitment to prioritize Texans' safety and quality of life, stating that any project failing to comply with state requirements will be denied grid connection.