Texas Halts Data Centers Over 474 GW Grid Requests
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- Gov. Greg Abbott called for an audit of all data centers in the ERCOT interconnection queue, where requests total about 474 GW — more than five times Texas' record peak demand — and approximately 90% are data center proposals
- Abbott's audit will examine whether data centers provide their own power or depend on the ERCOT grid, whether they bring and reuse their own water, and which projects pay their own way versus receive state tax incentives, grants, or abatements
- ERCOT responded by delaying its Batch Zero transmission planning study and plans to seek a good-cause exemption from the timeline at the Public Utility Commission of Texas' Aug. 20 open meeting
- Troutman Pepper Locke characterized the pause as a 'delay of indeterminate duration,' urging investors to assess project viability, lender security interests, and counterparty termination rights
- Data Center Coalition's Dan Diorio urged swift action to 'distinguish between speculative projects and serious, committed investors,' citing 'billions of dollars in investment and hundreds of thousands of jobs' at stake
- The Texas pause follows New York, which in July halted new data center approvals for up to a year while it drafts new development rules
Why it matters: With 474 GW in interconnection requests against a peak demand that has never crossed roughly five times less, Texas is signaling that speculative data center filings — not committed projects — are what's jamming the queue. Developers with financing tied to near-term interconnection approvals now face an open-ended timeline, and the Aug. 20 PUCT meeting will determine whether ERCOT's Batch Zero process resumes or stretches further.
