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ARTICLE · 10 AUGUST 2026

Texas Imposes New Audit Requirement For Data Center Projects, Delaying ERCOT Interconnection Reviews

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Texas Governor Greg Abbott has ordered a comprehensive audit of data centers seeking connection to the state's power grid, halting the advancement of projects through ERCOT's interconnection process. The directive requires verification of project compliance with state requirements and extends beyond electrical demand to examine ownership, public incentives, water usage, and community impacts.

United StatesEnergy and Natural Resources
Joshua Forman
Joshua Forman
Michael A. Boldt
Michael A. Boldt
Elizabeth Ross Hadley
Elizabeth Ross Hadley
Sergio Cavazos
Sergio Cavazos

On Aug. 3, 2026, Texas Gov. Greg Abbott directed the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to conduct a comprehensive verification and audit of data centers advancing through ERCOT’s interconnection process. According to Gov. Abbott’s directive, the audit must be completed before additional data center projects may proceed, and projects that fail to comply with PUCT and ERCOT requirements or state law must be denied connection to the Texas grid.

Gov. Abbott cited the scale of proposed development and concerns about grid reliability. ERCOT is considering requests to connect approximately 474 gigawatts to connect to the Texas grid — more than five times the system’s record peak demand. According to the governor’s letter, data centers account for approximately 90% of the requested new load. Gov. Abbott also cited some data centers’ failure to comply with a PUCT survey regarding power and water use.

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