Amid growing public backlash to the rapid buildout of data centers across Texas, Gov. Greg Abbott on Monday announced a moratorium on the approval of data centers until regulatory agencies can audit proposed data centers seeking connection to the state’s electric grid.
It is unclear how long the audit will take, but Abbott is asking the Public Utility Commission of Texas and the Electric Reliability Council of Texas to ensure data center developers provide information on tax breaks they will receive; power use and generation; water use and cooling operations; efforts to reduce impacts on local communities; and ownership of the facility. Any projects that fail Abbott’s ordered “comprehensive verification and audit” should be denied connection to the grid, the governor said.
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Abbott’s letter to the PUCT and ERCOT directs them to conduct the audit on all data centers advancing through ERCOT’s interconnection queue, or the line for energy intensive projects seeking connection to the electric grid. ERCOT is currently tracking more than 1,800 projects in the queue, representing over 474 gigawatts of electricity, or more than five times the grid’s record for peak demand, according to ERCOT.
ERCOT and the PUCT are already conducting a review of some of the projects in the queue through a process known as “batch zero.” It is unclear if Abbott wants agencies to audit’s order refers only to those projects or if he wants all of the nearly 2,000 requests currently in the queue.
Approximately 90% of the new power requests are data centers, Abbott said.
“Our top priority is to protect Texans’ safety and quality of life,” Abbott wrote 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.”
Abbott cited the failure of some data centers to comply with a recent PUCT’s survey measuring water and power usage as the reason the audit was needed because it hinders the agencies’ ability to make informed decisions.
The Texas Tribune has identified 335 data centers operating in Texas. The state is currently the second largest market for the facilities in the country, behind Virginia, and is poised to take the top spot. The Tribune has identified at least 248 planned data centers coming to the state, although hundreds more in lesser development phases line up in the power queue.
Monday’s letter is the latest effort by Abbott to demonstrate tighter regulation of an industry quickly coming under political scrutiny in Texas.
In June, Abbott directed the PUCT and ERCOT to require that data centers fully fund the costs of electric infrastructure needed to serve them and take other measures to reduce electricity costs to residents.
On July 17, PUCT Chair Thomas Gleeson responded to Abbott with his own letter outlining efforts the agencies have already taken and calling on the Legislature to grant them more authority to regulate the industry.
Abbott’s proposal may disrupt ERCOT’s ongoing rework of its approval process for projects in the interconnection queue, requiring large-load projects to provide more detailed information before they can advance. The new rules for the first set of projects under consideration, known as “batch zero,” were approved by the PUCT in June. The agencies are currently working to develop a more permanent set of rules for projects still in the queue.
An ERCOT spokesperson said the grid manager is reviewing Abbott’s order and will postpone the Batch Zero transmission planning study that is currently underway.
This is a developing story. Check back for updates.