TEXAS — Governor Greg Abbott directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas to audit all new data center projects seeking connection to the state grid. The audit must be completed before any data center project can move forward in the interconnection process.

Projects that fail to meet requirements established by the agencies and state law will be denied access to the Texas electric grid. Abbott cited the failure of data centers to respond to a previous voluntary survey as a reason for the new audit requirement.

"Our top priority is to protect Texans’ safety and quality of life," Abbott said. "Simply put, Texans must come first." He stated that any project failing to comply with the requirements set forth by the agencies and state law must be denied connection to the grid.

The directive requires regulators to collect specific information from proposed developments. This includes identifying the ownership and controlling interests of the projects and determining whether they are receiving state or local financial assistance, such as tax incentives, grants, or abatements.

Regulators must also gather data on projected annual and peak electricity demand, including whether the facilities plan to generate their own power. The order mandates the collection of water usage plans, covering expected consumption, sources, and the use of water-efficient cooling technologies. Additionally, developers must outline measures to reduce impacts on surrounding communities, such as noise mitigation, lighting controls, traffic improvements, and emergency response coordination.

The Electric Reliability Council of Texas is tracking 474 gigawatts of new connection requests, which represents more than five times the grid operator's record peak electricity demand. In January 2026, the council had 233 gigawatts of projects waiting to connect to its grid.

Approximately 90 percent of the new power requests in the council's interconnection queue are from data centers. The council is currently tracking more than 1,800 projects in its interconnection queue. Texas is the second-largest data center market in the U.S. behind Virginia.

According to the Texas Tribune, approximately 335 data centers are currently operating in the state, and at least 248 planned data centers are coming to Texas. An ERCOT spokesperson said the grid manager is reviewing the governor's order and will postpone the Batch Zero transmission planning study.

Public Utility Commission of Texas Chair Thomas Gleeson sent a letter to Abbott on July 17, 2026, outlining efforts the agencies have taken. Gleeson called on the Legislature to grant more authority to regulate the industry. In June 2026, Abbott directed the commission and the council to require data centers to fully fund the costs of electric infrastructure needed to serve them.

Texas Agriculture Commissioner Sid Miller renewed his call on July 24 for Abbott to convene a special legislative session to address concerns about data centers. Miller warned that continued inaction threatens Texas agriculture, rural communities, and the state's electric grid.

The San Marcos City Council adopted a new ordinance on June 16 amending zoning rules to effectively ban data center development in the city. The council cited concerns about strain on local water and energy resources.

A poll from the University of Texas and the Texas Politics Project released June 24 found that 56% of Texas registered voters oppose the construction of data centers in their communities, with 42% strongly opposed. Utility-scale solar capacity in Texas grew fourfold between 2021 and 2025.

Why It Matters

The mandate halts progress for over 1,800 projects in the interconnection queue, where data centers account for roughly 90 percent of requested power. This volume represents more than five times the grid operator's record peak demand, creating a bottleneck that could delay infrastructure planning studies. By requiring audits on water usage, community impacts, and financial assistance before approval, the order establishes a new regulatory hurdle for an industry already identified as the second-largest market in the U.S.