Texas Governor Halts New Data Centers, Orders Audits Amid Grid Strain

Texas Governor Greg Abbott announced on Monday that all new data center projects in the state will be subject to audits by the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT). This move comes as ERCOT's interconnection queue has surged to 474 gigawatts, with about 90% of those requests attributed to data centers. The queue now represents more than five times ERCOT's total peak demand, raising concerns about grid reliability. Abbott has directed the agencies to collect detailed information from proposed projects, including electricity and water demand, noise mitigation, light controls, tax incentives, and ownership details. Historically, Texas has favored lighter regulation, but the rapid growth of data centers and crypto-mining facilities has pushed electricity prices higher. While the state's ample natural gas reserves, wind, and solar have helped meet demand—utility-scale solar capacity grew fourfold between 2021 and 2025—the influx of projects threatens to overwhelm the grid. Abbott's previous voluntary survey to gather information from data centers was largely ignored, prompting this more forceful approach. The audits could signal a shift in Texas's status as a data center mecca.