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Abbott orders audits before Texas data centers can connect to grid
Texas Gov. Greg Abbott directed regulators to complete compliance, water and power, and ownership audits for data center interconnection requests before any project moves forward.
Texas Gov. Greg Abbott has ordered a halt on new data center connections to the Texas power grid, directing the Public Utility Commission of Texas and the Electric Reliability Council of Texas to complete a comprehensive audit of data center projects seeking interconnection.
The audits are intended to collect information on each project’s water use, power sources, whether the projects received state and local tax incentives, and steps being taken to limit impacts on neighboring property owners and communities. Abbott also instructed agencies to gather ownership details, including controlling interests, and said the audit must be completed before any project can proceed.
Abbott said the state’s priority is protecting Texans’ safety and quality of life, adding that any project that does not comply with requirements set by PUCT and ERCOT and state law must be denied grid connection. The governor warned that data centers are driving rapidly rising load that could jeopardize grid stability and reliability.
The directive comes as Texas is on pace to surpass Virginia as the largest domestic data center market by 2030, according to JLL’s North America 2025 Year-End Data Center report. Abbott’s press materials also cite ERCOT considering more than 474 gigawatts of power capacity requested by large projects, more than five times record demand, and note Texas lost more than $1 billion in state sales tax revenue last year due to an exemption for qualified data centers, with that figure expected to rise by 33% over the next five years to nearly $8 billion.