Aug 4 (Reuters) – Texas Governor Greg Abbott ordered a pause on approvals of new data center projects through the state’s grid interconnection process, citing concerns that a surge in electricity demand could threaten reliability at a time when opposition to the projects is growing.
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The state is poised to become one of the world’s largest data-center hubs, with industry forecasts suggesting it could surpass Virginia by 2030 thanks to abundant land, energy supplies and a business-friendly environment.
However, local opposition to the facilities is rising due to their heavy use of energy and water, along with the pollution that stems from power generation needed to run them. Last month, New York became the first state to impose a moratorium on large-scale data centers.
In a letter to the Public Utility Commission of Texas and grid operator ERCOT sent Monday, Abbott directed the agencies to conduct an audit of all planned data centers seeking grid connections before any more facilities are allowed to move forward.
ERCOT is currently reviewing roughly 474 gigawatts of proposed new electricity demand, more than five times the state’s record peak load, the governor said, adding that about 90% of the requests are from data centers.
“Any data center project that fails to comply with the verification and audit process to protect the reliability and resilience of the Texas electric grid must be denied,” Abbott wrote. “Simply put, Texans must come first.”
Under Abbott’s directive, developers will be required to provide more information on power demand, water use, tax incentives, ownership structures and efforts to mitigate local impacts.
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Politicians have started to turn against the centers due to rising opposition. A June Reuters/Ipsos poll showed just one-third of Americans approve of the pace of data-center construction.
Last week, Texas Lieutenant Governor Dan Patrick joined calls for regulators to deny applications for three 765-kV lines under ERCOT’s Permian Basin Reliability Plan. Rural landowners have objected to the routes.
“If these lines are going to be built, which many believe must be built, then the PUC’s transmission approval process must not only prioritize strengthening the grid, but also protect Texas landowners and communities,” Patrick wrote in a post on X.
ERCOT said it would postpone a study under a framework approved in June to manage data center power demands.
“ERCOT is reviewing Governor Abbott’s letter concerning data centers and will work with the Public Utility Commission of Texas to implement the Governor’s directive, including postponement of the Batch Zero transmission planning study,” the grid operator said in an emailed statement.
The PUC said that it appreciated Abbott’s directive and would work with ERCOT to ensure the requirements are fully carried out.
(Reporting by Nichola Groom; Editing by Nathan Crooks and David Gaffen)
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