Texas Halts Data Center Grid Approvals as Power Demand Requests Surge Past 474 GW

Texas data center developers can still build, but securing power from the state's main grid has become significantly more complex. Governor Greg Abbott has ordered regulators to pause approvals for data centers seeking connections to the Electric Reliability Council of Texas (ERCOT) grid until proposed projects undergo a comprehensive audit. The decision comes as requested electricity demand has climbed above 474 GW, with data centers accounting for roughly 90% of the proposed load.

The move marks a pivotal shift in Texas's approach to managing the explosive growth of digital infrastructure. For cloud providers, AI developers, and infrastructure investors, the order could translate into longer approval timelines, additional disclosure requirements, and greater uncertainty around project schedules. Texas, the nation's second-largest data center market behind Virginia, is now signaling that grid access will no longer be assumed but earned through rigorous scrutiny.

Governor Abbott directed the Public Utility Commission of Texas (PUCT) and ERCOT to audit data centers moving through the grid's interconnection queue. The reviews will examine projected electricity use, on-site and off-site power generation, water demand, cooling operations, tax incentives, ownership information, and measures to reduce noise, lighting, and other effects on nearby communities. "Our top priority is to protect Texans' safety and quality of life," Abbott said in a statement cited by The Texas Tribune. "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," he added.

The Data Center Coalition, a trade group representing major technology companies, said the audit could help regulators distinguish responsible developers without unnecessarily slowing compliant projects. "Done correctly, this review can showcase the good actors in the data center industry rather than delaying them unnecessarily, ensuring Texas will continue to be the national leader in economic development," coalition spokesperson Dan Diorio said, per The Texas Tribune. Officials have not specified how long the reviews will take or when approvals will resume, leaving developers in a state of limbo.

The 474 GW figure requires context to understand its full implications. The Texas Tribune noted that ERCOT's queue includes more than 1,800 proposed projects representing over 474 GW of requested power, more than five times the grid's record peak demand. This number does not mean Texas must immediately supply 474 GW; developers often join interconnection queues early because grid access can take years, and some proposals never advance beyond the planning stage. TechCrunch reported that ERCOT's queue stood at 233 GW in January before more than doubling in less than six months, underscoring the rapid acceleration of demand tied to AI infrastructure, cloud services, and other computing workloads.

Not every Texas project is affected by the directive. The order applies to data centers seeking access to the ERCOT grid but does not necessarily stop projects that generate their own electricity or facilities planned in regions outside ERCOT, including El Paso. The Texas Tribune has identified at least 335 operating data centers and 248 planned facilities in the state, indicating the scale of development that could be impacted. Developers may now need to account for longer approval timelines, more detailed disclosures, and the possibility that a grid connection will be rejected.

For IT and infrastructure leaders planning Texas capacity, the new audit adds a critical layer of risk assessment. Companies should verify whether a proposed site depends on an ERCOT connection and whether its schedule includes time for the new review. Operators should also review cooling designs, water projections, backup or on-site generation, local community requirements, and any tax incentives tied to the facility. The review does not end Texas's data center expansion, but it adds a new gate to the process. Until regulators clarify the audit timeline and approval standards, developers should treat grid access as a project risk rather than an assumption, reshaping how the industry approaches one of the nation's most active data center markets.