Texas says data centers must pass an audit before connecting to the grid

Lauren Feiner

is a senior policy reporter at The Verge, covering the intersection of Silicon Valley and Capitol Hill. She spent 5 years covering tech policy at CNBC, writing about antitrust, privacy, and content moderation reform.

Texas announced new a audit on data centers that could slow approval for new facilities seeking to connect to the state energy grid.

Governor Greg Abbott (R) on Monday directed the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to verify and audit new data center proposals, writing that the review is needed to “keep the grid stable and reliable.” Data centers will need to provide information on state and local incentives they’ve received, how much they’d rely on the state grid, expected water consumption and sources, and how they plan to track community impacts including noise.

It’s not clear how long the audit will take, and the extent to which it could slow development. Some parts of Texas, like El Paso, fall outside of ERCOT’s domain, The Texas Tribune notes, and some data centers can opt to generate power on-site, rather than connecting to the state energy grid. But following New York’s data center moratorium, it’s a signal that elected leaders across the country are recognizing a bipartisan desire to pump the brakes on energy-intensive projects.

ERCOT is considering over 474 gigawatts worth of requests to connect to Texas’ grid, according to Abbott’s office, which is more than five times its record peak electricity demand. Data centers account for about 90 percent of new power requests. A Tribune analysis found there’s already at least 335 data centers operating in the state and at least 248 more planned, making it the second-largest data center market in the country behind Virginia.

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