Data Centers Seeking to Connect to Texas Grid Must Now Undergo Audit Before Moving Forward

Following the state government’s efforts to restrict data centers from the Texas power grid, Gov. Abbott is now requiring data centers to undergo audits before being granted access.

Why does this matter?

Projects that do not meet the new requirements will be denied connection and be forced to entirely provide their own power.

What are people saying?

• Gov. Abbott: “Our top priority is to protect Texans’ safety and quality of life.”
• Josh Levi, President & CEO of the Data Center Coalition: "The data center industry is committed to paying its own way for the power it uses, and the Data Center Coalition will continue to highlight the credible research that consistently shows data centers are not the primary driver of rate increases."

ERCOT has received over 474 gigawatts of requests to connect to the Texas power grid, which is over five times the peak record electricity demand in the state. 90% of those requests are from data centers. 

On June 10, Gov. Abbott directed the PUC and ERCOT to require data centers to fully fund the costs of their operations, which includes power. This directive aimed to ensure that Texas residents do not take the brunt of the costs on the power grid.

“Any project that fails to comply with the requirements set forth by the PUCT and ERCOT, and by state law, must be denied connection to the Texas grid,” said Gov. Abbott. “Simply put, Texans must come first.”

New directions require data centers to explain how they plan to provide and pay for their power, the extent to which they use water or bring their own and the extent to which they will reduce impacts on Texas consumers.

Although the data center industry claims research proves that rate increases are not directly caused by data centers, the state of Texas continues to crack down on the industry.