Around 300 proposed Texas data center projects are on hold for several months after Gov. Greg Abbott (R-TX) ordered an audit of new development, according to state regulators.
Between 250 and 300 projects, most of them data centers, are set to move through the audit queue, the Electric Reliability Council of Texas told the Public Utility Commission. The ERCOT is the state system that regulates the energy grid, which Abbott is aiming to boost through his order earlier this month, mandating certain reforms for data center developers looking to come to Texas.
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Under standard procedure, proposed data centers undergo extensive evaluation by the ERCOT before being approved in the Lone Star State. Abbott’s order added some more standards to the process and will audit only “Batch Zero” projects, which are data center proposals that have already secured financing and land to build on, in the ERCOT’s queue.
It would take “several months” to audit the projects before greenlighting them to connect to the state grid, according to the ERCOT. Regulators are aiming to complete their study of the first batch of projects by April 2027, ERCOT Senior Vice President Chad Seely said. Regulators will send information requests to up to 300 large energy consumers to verify their eligibility for the study. They will also collect “community impact information.”
“Just from a holistic standpoint, having all that community impact information on how they’re handling water technology [and] power deliverability gives a better perspective to the state as we see these loads start to come onto the grid over the next several years,” Seely added.
The development comes after Abbott placed a moratorium on new data center development in Texas on Aug. 3, ordered an audit, and outlined a number of steps that projects must adopt to be approved by the state. Several of those policies, including on water usage and energy capacity, are already being widely adopted by data center builders.
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At the time, Abbott said regulators will scrutinize developers for whether they are providing their own power or depending on the ERCOT grid, bringing their own water or reusing their own water, as opposed to using community resources, and looking at the extent to which data centers are paying their own way or depending on the state for financial assistance, including through state and local tax incentives.
“I’d make clear already: Any AI data center even thinking about coming here, they got to bring their own money, bring their own power, reuse their own water, and do it in a way that reduces the cost of electricity for residents across our state,” the governor said earlier this summer. “We must eliminate the tax break they are getting. They must be responsible for funding their own projects here in Texas. We will get that done.”
