Texas halts new data centers as governor calls for audits

Tech companies and developers across the U.S. have aggressively scouted locations for new data facilities, gravitating toward Texas due to its flexible regulations and perceived abundant power supply. Currently, only the state of Virginia hosts a higher concentration of data centers than Texas.

However, the unprecedented surge in demand has pushed local infrastructure toward its limits. On Monday, Governor Greg Abbott announced that all incoming data center developments must undergo mandatory audits conducted by both the Public Utility Commission of Texas (PUCT) and the state’s grid operator, the Electric Reliability Council of Texas (ERCOT).

The scale of ERCOT’s interconnection backlog has expanded dramatically over the past year. Back in January, ERCOT managed 233 gigawatts of projects waiting for grid access. In less than six months, that metric more than doubled, with Abbott's office noting that ERCOT is now tracking 474 gigawatts of new connection requests, roughly 90% of which originate from data center proposals.

Stock photo for illustration only, not from the actual event

Although major operators like Google and Microsoft chose Texas for its natural gas infrastructure, the Energy Information Administration (EIA) notes that utility-scale solar and wind power have helped the grid operator keep pace with escalating electricity demand, with solar capacity quadrupling between 2021 and 2025.

Abbott previously attempted a voluntary approach, asking data center operators to provide operational details through a survey. Because most companies failed to respond, the governor has opted for a much heavier regulatory hand to enforce compliance.

Source: TechCrunch