Texas halts new data centers as governor calls for audits

Tech companies and developers person been scouring the U.S. for places to physique information centers, and they’ve been drawn to Texas’s escaped regulations and seemingly abundant powerfulness supply. Only Virginia hosts much information centers than Texas.

But adjacent Texas tin beryllium pushed to the brink. Governor Greg Abbott announced Monday that each caller information halfway projects volition request to beryllium audited by some the Public Utility Commission of Texas (PUCT) and the state’s grid operator, the Electric Reliability Council of Texas (ERCOT).

The size of ERCOT’s interconnection queue has grown dramatically this year. In January, ERCOT had 233 gigawatts of projects waiting to link to its grid. In less than six months, that fig had much than doubled. Today, Abbott’s bureau said ERCOT is tracking 474 gigawatts of caller transportation requests. About 90% of those are information centers, according to the grid operator.

Some of those projects are simply insubstantial proposals astatine this point. Because queues for grid connections person grown truthful long, the archetypal enactment galore developers instrumentality is to get successful line. Many projects fizzle retired arsenic they progress.

If adjacent a fraction of those projected projects travel to fruition, they could overwhelm the Texas grid. The interconnection queue contiguous represents much than 5 times ERCOT’s total highest demand. 

While galore information halfway operators, including Google and Microsoft, person been drawn to Texas for its ample earthy state reserves, upwind and star person helped ERCOT support pace with increasing energy demand, according to the Energy Information Administration (EIA). Utility-scale star capableness grew fourfold betwixt 2021 and 2025. Meanwhile, energy prices declined implicit overmuch of that time, according to a report from Amperon.

Electricity prices successful Texas are comparatively affordable compared with different states, but they person been rising. Data centers and crypto mining facilities person pushed prices higher, according to the EIA.

Abbott intelligibly wants to caput disconnected that trend. The politician has directed PUCT and ERCOT to cod a scope of accusation astir projected information centers, including their on- and off-site request for energy and water, sound mitigation efforts, airy controls, usage of taxation incentives, and ownership details.

Historically, Texas has favored lighter regularisation than galore different states erstwhile it comes to development. Houston famously lacks a zoning code, and the authorities has a business-friendly regulatory environment. But information centers person become a flash point crossed the country, including successful Texas. Abbott had antecedently tried to coax information centers into providing much accusation done a voluntary survey. Most didn’t respond, truthful he’s taking a heavier manus to compel compliance. 

Depending connected what emerges from the audits, Texas’s days arsenic a information halfway mecca whitethorn beryllium coming to a close.