Texas freezes data center projects pending sweeping audits

Texas Governor Greg Abbott has ordered a statewide freeze on data center projects, preventing them from connecting to the state's power grid until comprehensive audits are completed. The directive mandates regulatory agencies to gather detailed information on data centers' ownership, funding, power and water requirements, and their anticipated impact on surrounding communities. Governor Abbott stated that some data centers had already violated state law by not disclosing their power and water usage.

The move comes as the Electric Reliability Council of Texas (ERCOT), the state's power grid operator, faces an unprecedented volume of connection requests, totaling over 474 gigawatts – more than five times Texas' historical peak demand. Approximately 90% of these new requests originate from data center projects, raising concerns about the grid's stability and reliability. The audit aims to assess whether these new developments pose a threat to the power infrastructure.

This action follows a recent one-year moratorium on new data center construction in New York. While former President Donald Trump previously highlighted Texas, Alabama, and Florida as states welcoming data center development for economic benefits, the current freeze indicates a shift in policy focus towards grid stability. The audit is expected to impact projects like the hyperscale data center planned for Fort Bliss, Texas, a joint development between the U.S. Army and global investment firm Carlyle under the Army's Enhanced Use Lease program.