AUSTIN, Texas — Gov. Greg Abbott has directed Texas energy regulators to conduct a comprehensive review of data center projects seeking connections to the state’s power grid, saying projects that fail to meet state requirements should not receive approval to connect.
The directive comes as the Electric Reliability Council of Texas, or ERCOT, considers more than 474 gigawatts of requests to connect to the Texas grid. According to Abbott’s office, about 90% of those requests involve data center projects.
Abbott said the volume of proposed electricity demand requires additional scrutiny to protect the reliability and stability of the state’s power system.
“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.”
The audit will examine the financial assistance proposed data center developers receive through tax incentives, grants and other public funding programs.
Regulators will also review how much electricity each proposed facility is expected to use, whether developers plan to generate some of their own power and what measures they would take to reduce their demands on the ERCOT system.
The review will include water use and conservation plans. Officials will examine proposed cooling systems and whether facilities would rely on local water supplies or use recycled water.
The directive also calls for an assessment of potential impacts on surrounding communities, including traffic, noise, lighting and emergency response needs.
Regulators will also collect information about the ownership and controlling interests of proposed data center projects.
Abbott’s office said projects that fail to meet requirements established by ERCOT, the Public Utility Commission of Texas or state law could be denied connections to the Texas power grid.
The review comes as Texas continues to attract major data center investments, increasing competition for electricity and raising questions about how the state will accommodate the sector’s projected power demand.
