Texas data center projects must stop until state audits them
Governor Greg Abbott has issued a statewide moratorium on the approval of new data centers in Texas until regulatory agencies complete a comprehensive audit. The Public Utility Commission of Texas and the Electric Reliability Council of Texas are tasked with scrutinizing proposed data centers' tax breaks, power and water usage, community impacts, and ownership. This action addresses growing public backlash regarding data center expansion and its strain on the state's electric grid and water resources.
Governor Greg Abbott of Texas has ordered a moratorium on the approval of data center connections to the state's electric grid, pending a comprehensive audit by the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT). This decision, announced Monday, comes in response to increasing public concern over the rapid expansion of data centers in Texas, which is poised to become the largest market for these facilities. Abbott's directive mandates that data center developers provide detailed information on tax incentives, power and water usage, efforts to mitigate local impacts, and facility ownership.
The audit aims to ensure that projects failing to meet state requirements are denied grid connection. Currently, ERCOT's interconnection queue includes over 1,800 projects, with approximately 90% identified as data centers, representing a significant portion of the grid's capacity. Abbott's order also highlights the low compliance rate with a recent PUCT survey on water and power usage, which he cited as a key reason for the audit.
The Governor's action may disrupt ERCOT's ongoing review of projects in its interconnection queue, including the "batch zero" process, which now faces postponement. While an advocacy group, Environment Texas, praised the questions raised by the audit, its executive director, Luke Metzger, called for a special legislative session to enact new protective laws. This development underscores the growing scrutiny of data center energy and water demands in Texas.