Abbott directs PUC, ERCOT to shield residential ratepayers from data center grid costs
Governor Greg Abbott has directed the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) to take immediate action to prevent data center expansion from increasing residential electricity bills. He outlined a legislative agenda for the next session, including requiring data centers to pay their own infrastructure costs, use water-efficient technologies, and report usage. These actions aim to ensure data centers reduce costs for residents and manage resource use across Texas.
Governor Greg Abbott has issued directives to the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) to prevent data center expansion from burdening residential electricity customers with infrastructure costs. In a letter, Governor Abbott instructed the PUC to ensure data center grid interconnections reduce residential bills, mandate data centers fully fund their electric infrastructure costs, and, with ERCOT, review existing authority to safeguard Texans and their resources. The PUC and ERCOT are required to submit a joint memorandum by July 17 summarizing actions taken and recommending legislative changes, with the PUC also tasked to initiate action by July 31 to reduce residential transmission costs.
Abbott further outlined a legislative agenda for the upcoming session, proposing bills to codify PUC requirements for data centers to cover their infrastructure costs, ensure data centers add to Texas's electric capacity, require new data centers to use water-efficient cooling systems, mandate annual reporting of electricity and water usage to the PUC, repeal sales tax exemptions and outdated incentives, and impose neighborhood impact reduction measures like setbacks and noise technology. While acknowledging previous legislation (Senate Bill 6) addressed some issues by requiring large loads like data centers to meet reliability standards, Abbott stated that more action is needed to balance economic growth with consumer interests and resource protection.