Texas hits the brakes on new data centers connected to main power grid

Governor Greg Abbott has ordered an audit of the state’s new data center projects.

Gov. Greg Abbott of Texas recently ordered a halt to new data center projects that intend to connect to the state’s power grid.

Abbot directed the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to conduct a verification and audit of all data centers seeking approval through ERCOT’s interconnection process. The audit must be completed before any data center project moves forward.

Projects that fail to comply with the requirements set forth by the PUCT and ERCOT will be denied connection to the Texas grid. The audit will require data centers to report information about their proposed water use, tax breaks they receive, what cooling technologies they’re using, and who owns the projects.

It’s unclear how long the pause will last or how long it could take ERCOT and the PUC to conduct the audit. Texas is slated to overtake Virginia as the data center capital of the world, and as many as 474 gigawatts worth of projects are seeking to plug into ERCOT—more than five times the region’s all-time demand record, according to a report by EE News.

Abbott also directed the PUCT and ERCOT to obtain the following information from each data center project:

  • Information detailing the extent to which data centers are paying their own way or depending on the state for financial assistance. That would include all state and local tax incentives, grants, abatements, or other public financial assistance received or expected to be received.
  • The extent to which data centers are providing their own power or depending on the ERCOT grid for that power. Details should include projected annual and peak electricity consumption; and any effort and progress to construct or procure on-site electric generation including generation type, or other measures to reduce demand on the ERCOT grid.
  • The extent to which data centers are bringing their own water and reusing their own water as opposed to using water needed by local communities. The details should include projected annual and peak water consumption and anticipated sources of water supply. You must also obtain information about the cooling technology that will be utilized, including whether the facility will employ air-cooled, closed-loop, or another water-efficient cooling system.
  • The extent to which data centers are using measures to reduce impacts on neighboring property owners and communities, including noise mitigation, light controls, setbacks, traffic improvements, emergency response coordination, and other community protection measures, understanding that each community is unique.
  • Information detailing the ownership and controlling interests in the project.
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