Texas Governor Greg Abbott has directed the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to audit data centers seeking to connect to the state's power grid. As part of this directive, Governor Abbott has set a moratorium on the approval of data center projects connected to the ERCOT-linked grid pending the results of the audit.
The audit is intended to ensure grid stability and reliability. Governor Abbott stated, “Our top priority is to protect Texans’ safety and quality of life.”
Data center applicants are required to provide information regarding state and local incentives, grid reliance, expected water consumption and sources, and community impact tracking, such as noise.
Grid demand and compliance
ERCOT is currently considering over 474 gigawatts of requests to connect to the Texas grid, a figure that exceeds the record peak electricity demand by more than five times. Data centers account for approximately 90 percent of these new power requests in Texas.
28 companies
Number of data center operators that complied with PUCT requests for water and power usage information out of 377 asked.
There are at least 335 data centers operating in Texas and at least 248 more currently planned. Texas stands as the second-largest data center market in the United States, following Virginia.
Market implications and political response
Bernstein analysts stated that the moratorium is unlikely to impact Bitcoin miners in Texas who are already under contract for approved electric capacity. Analysts believe the audit will throttle the speculative data center pipeline and increase the value of genuine sites with development history.
Bernstein analysts identified Cipher Digital (CIFR), Core Scientific (CORZ), and CleanSpark (CLSK) as miners potentially most exposed to future public opposition to data center expansion. CIFR reported a second-quarter loss of $0.65 per diluted share, compared to a loss of $0.12 per diluted share last year. CIFR shares fell by more than 7% in Tuesday's premarket trading.
IREN and Riot Platforms (RIOT) maintain Texas mining operations that are fully ERCOT grid approved. Data center developments in El Paso, Texas, remain unaffected by the ERCOT moratorium because the city falls outside of ERCOT's jurisdiction. Additionally, projects that generate their own power on-site are unaffected as they do not connect to the ERCOT grid.
The directive has faced criticism from political figures. Texas Commissioner Sid Miller described the move as “all hat and no cattle — empty political rhetoric wrapped in meaningless fluff.” An opponent of State Representative Gina Hinojosa claimed Governor Abbott has taken millions from data center CEOs while giving Texans lip service to non-existent restrictions.
Updates
The ERCOT interconnection queue has more than doubled in less than six months, with 233 gigawatts of projects waiting to connect as of January. Additionally, data centers and crypto mining facilities have been reported by the EIA to have driven up electricity prices in Texas. Meanwhile, a critic of State Representative Gina Hinojosa suggested that Governor Abbott's call for a pause might last only one day.
The ERCOT interconnection queue has more than doubled in less than six months, with 233 gigawatts of projects waiting to connect as of January. Additionally, the Energy Information Administration (EIA) reports that data centers and crypto mining facilities have driven up electricity prices in Texas, while solar capacity saw a fourfold increase between 2021 and 2025. Meanwhile, opponents of State Representative Gina Hinojosa suggest Governor Abbott's proposed pause could last only a single day.
The audit will mandate that data center applicants disclose facility ownership, cooling operations, power generation methods, light controls, noise mitigation efforts, and both on-site and off-site electricity demand. Additionally, the ERCOT interconnection queue has grown from 233 gigawatts in January to 474 gigawatts, with the combined pending demand expected to significantly exceed forecasted data center requirements by 2035. Bernstein analysts noted that these audit measures could potentially increase the value of existing Bitcoin mining and AI sites.
The mandated audit will require data center applicants to disclose information regarding facility ownership, cooling operations, power generation methods, light controls, noise mitigation efforts, and both on-site and off-site electricity demand. Additionally, the ERCOT interconnection queue has grown from 233 gigawatts in January to 474 gigawatts, with the combined demand of these pending applications expected to exceed forecasted data center demand by 2035. While Bernstein analysts suggest the audit could boost the value of existing Bitcoin mining and AI sites, an opponent of State Representative Gina Hinojosa claims the Governor's pause could last only one day.
The audit will require data center applicants to disclose extensive details, including facility ownership, cooling operations, power generation methods, light controls, noise mitigation, and their use of tax incentives and state financial assistance. Additionally, applicants must provide information regarding their on-site and off-site electricity demand, greenhouse gas emissions, emergency response coordination, and potential impacts on local water supplies and neighboring communities. ERCOT officials also stated they will postpone the 'Batch Zero' process while working with state regulators to implement the Governor's directive.
The audit will require data center applicants to provide detailed information regarding ownership, tax incentive use, cooling operations, power generation, and greenhouse gas emissions. Additionally, applicants must disclose their electricity demand, use of state financial assistance, and potential impacts on local water supplies and neighboring communities. The process will also cover noise mitigation, light controls, emergency response coordination, and traffic improvements.
The audit directed by the Governor will require data center applicants to disclose information regarding facility ownership, controlling interests, cooling operations, power generation methods, and greenhouse gas emissions. Additionally, applicants must provide details on tax incentive use, state financial assistance, on-site and off-site electricity demand, noise mitigation, emergency response coordination, and potential impacts on local water supplies and neighboring communities. ERCOT officials have confirmed they will postpone the 'Batch Zero' process while coordinating with state regulators to implement the directive.
The audit will require data center applicants to provide information regarding facility ownership, cooling operations, power generation methods, light controls, noise mitigation, electricity demand, setback and traffic improvements, emergency response coordination, impacts on neighboring communities, use of state financial assistance, controlling interests, potential impacts on local water supplies, greenhouse gas emissions, and the use of tax incentives. Additionally, ERCOT officials stated they will postpone the 'Batch Zero' process while coordinating with state regulators to implement the Governor's directive. Bernstein analysts noted that while the audit could boost the value of existing
The audit will require data center applicants to disclose ownership, cooling operations, power generation methods, and their use of tax incentives. Additionally, applicants must provide details on noise mitigation, greenhouse gas emissions, and potential impacts on local water supplies and communities. ERCOT officials confirmed that the governor's directive effectively pauses all data center projects and will include the postponement of the 'Batch Zero' transmission planning study.
The mandatory audit will require data center applicants to disclose details regarding facility ownership, cooling operations, power generation methods, electricity demand, tax incentive usage, and potential impacts on local water supplies and communities. Additionally, ERCOT officials confirmed the directive effectively pauses all data center projects and will postpone the 'Batch Zero' transmission planning study while working with the Public Utility Commission of Texas. Amidst these developments, the ERCOT interconnection queue has surged from 233 gigawatts in January to 474 gigawatts.
