Texas Governor Halts Data Center Grid Approvals After Only 28 of 377 Operators Responded to Audit

Austin, TX — Texas Governor Greg Abbott (R) has announced a moratorium on all data center approvals through the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) until the agencies complete an audit of data center applicants seeking to connect to the state's electric grid.

According to The Texas Tribune, the governor is requiring data center applicants to provide the following information:

• Tax break details
• Power use and generation data
• Water use and cooling operations
• Community impact reduction measures
• Facility ownership information

Applicants that have not submitted these details will be denied permission to connect to the grid.

Governor's Statement

"Our top priority is to protect Texans' safety and quality of life," Gov. Abbott wrote in his statement. "Any project that fails to comply with the requirements set forth by the PUCT and ERCOT, and by state law, must be denied connection to the Texas grid. Simply put, Texans must come first."

Background of the Review

The review reportedly stems from several data centers' failure to comply with a PUCT survey designed to determine water and power usage. The agency stated that it requested the required information from 377 data center companies — but only 28 have submitted so far.

Impact on Data Center Projects

While not a statewide moratorium, the directive affects many data center projects currently undergoing ERCOT approval. Key figures include:

• More than 1,800 projects are awaiting approval to connect to the grid
• 90% of those projects are data centers
• Combined demand from these applications is expected to reach 474 gigawatts
• That figure is five times ERCOT's current peak demand
• It is also much higher than forecasted data center demand by 2035

Exceptions to the Moratorium

The pause does not affect all projects, unlike New York's statewide ban. Exceptions include:

• El Paso, Texas, which is outside ERCOT's jurisdiction — data center developments there can continue unimpeded
• Projects bringing their own power, as they do not need to connect to the ERCOT grid

Reactions

Data Center Opponents

Critics say the measure does not go far enough, though some acknowledge it is a step in the right direction. They argue the state legislature must pass a law to regulate the industry, which is already the second largest in the U.S. after Virginia.

"Without legislative action, this directive is all hat and no cattle — empty political rhetoric wrapped in meaningless fluff," wrote Commissioner Sid Miller on the Texas Department of Agriculture's official Facebook page. "Texans need laws with teeth, not another press release designed to make it look like something is being done while hyperscale projects continue moving forward."

State Representative Gina Hinojosa

Hinojosa, who is expected to oppose Abbott in the November 2026 gubernatorial race, offered harsher criticism:

"So nice to see another strongly worded letter from Abbott after he proudly made Texas the wild west of data centers. Abbott's call for a 'pause' could be for one day – and no one buys it. He's taken millions from data center CEOs while giving Texans lip service to non-existent restrictions."

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