AUSTIN – Gov. Greg Abbott is directing state regulators to conduct a comprehensive audit of data center projects seeking to connect to the Texas power grid, saying the review is necessary to protect the state’s electric reliability as demand continues to surge.
Abbott announced Monday that he has instructed the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to verify and audit all data centers currently advancing through ERCOT’s interconnection process.
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Under the directive, the audit must be completed before any data center project can move forward. Projects that fail to meet requirements established by the PUCT, ERCOT and state law will be denied access to the Texas electric grid.
“Our top priority is to protect Texans’ safety and quality of life,” Abbott said in a statement. “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.”
Why Abbott says the audit is needed
According to the governor’s office, ERCOT is currently reviewing more than 474 gigawatts of requests to connect to the Texas grid, more than five times the state’s record peak electricity demand.
Officials said roughly 90% of those new power requests come from data centers, which have rapidly expanded as demand for artificial intelligence and cloud computing grows.
Abbott said that level of projected electricity demand could threaten the reliability and stability of the state’s power grid if projects are not properly evaluated.
What information data centers must provide
Building on a directive Abbott issued on June 10, the governor is also requiring the PUCT and ERCOT to collect additional information from each proposed data center project, including:
- Whether the project is receiving state or local financial assistance, including tax incentives, grants or abatements.
- Whether the facility plans to generate its own electricity or rely on the ERCOT grid, along with projected annual and peak electricity demand.
- Water usage plans, including expected consumption, water sources and whether the facility will use water-efficient cooling technologies.
- Measures to reduce impacts on surrounding communities, such as noise mitigation, lighting controls, traffic improvements and emergency response coordination.
- Information identifying the project’s ownership and controlling interests.
State officials said the additional information will help determine whether proposed facilities can support Texas’ growing economy while minimizing impacts on the electric grid and local communities.