Greg Abbott Orders Audit of Data Centers Before Grid Connections

Governor Greg Abbott (R) has ordered a comprehensive audit of data center projects seeking to connect to the Texas power grid, warning that projects failing to meet state requirements will be denied access to ERCOT.

Abbott Orders Audit of Data Center Projects

Gov. Abbott has directed the Public Utility Commission of Texas (PUCT) and the Electricity Reliability Council of Texas (ERCOT) to conduct a comprehensive verification and audit of all data centers currently advancing through ERCOT's interconnection process.

Under the directive, no data center project will be allowed to move forward until the audit is completed. Projects that fail to comply with requirements established by the PUCT, ERCOT, and state law will be denied connection to the Texas electric grid.

Gov. Greg Abbott: "Our top priority is to protect Texans' safety and quality of life."

ERCOT is currently reviewing more than 474 gigawatts of proposed grid connections-more than five times the state's record peak electricity demand. According to the governor's office, roughly 90% of those requests come from data center projects.

Abbott warned that the unprecedented demand could threaten the reliability and stability of the Texas electric grid if not properly managed.

Gov. Abbott continued: "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. Simply put, Texans must come first."

What Data Centers Must Disclose

Building on a previous directive issued June 10, Abbott instructed the PUCT and ERCOT to collect additional information from each proposed data center, including:

• Whether projects are relying on state or local tax incentives, grants, abatements, or other public financial assistance.
• Whether facilities will generate their own electricity or depend on the ERCOT grid, including projected annual and peak power consumption.
• Water usage plans, including projected consumption, water sources, reuse strategies, and cooling technologies.
• Measures to reduce impacts on surrounding communities, including noise, lighting, traffic, emergency response coordination, and other mitigation efforts.
• Ownership information and details about the project's controlling interests.

The Bottom Line

As Texas experiences growth in data center development, Governor Abbott is requiring a comprehensive review of every proposed project before allowing new connections to the state's electric grid, saying reliability and the needs of Texans must take priority.