AUSTIN, Texas — Texas Gov. Greg Abbott directed state energy regulators on Wednesday to develop measures aimed at shielding residential electricity customers from costs associated with the rapid expansion of data centers across the state.
In a letter sent to Public Utility Commission Chairman Thomas Gleeson and Electric Reliability Council of Texas (ERCOT) CEO Pablo Vegas, Abbott called for requirements that data center operators fully cover the costs of electric infrastructure needed to support their facilities, rather than shifting those expenses to residential ratepayers.
Abbott instructed both agencies to identify additional protections for residential and small business customers and to submit a joint report to his office by July 17. He also directed the Public Utility Commission to begin implementing actions by July 31 to reduce transmission-related costs for households.
The governor said in a statement that data centers should operate in a way that limits impacts on residential electricity prices, water resources, and local communities.
State officials said Texas currently has about 300 operating data centers, with more than 100 additional facilities planned or under development. Lawmakers have raised concerns about whether the state’s electric grid can accommodate continued growth in energy demand from large industrial users.
ERCOT CEO Pablo Vegas told lawmakers that grid capacity could be affected if new transmission lines and generation projects do not come online in time to meet demand from expanding industrial load.
Abbott said he also intends to work with the Texas Legislature on potential legislation addressing data center energy and water use, including requirements for more efficient cooling systems, improved reporting of resource consumption, and the phaseout of certain tax incentives.