Texas halts data center connections to power grid amid overwhelming demand

Nowhere is the US data center boom bigger than in Texas. But less than a year after declaring Texas the “epicenter of AI development,” Governor Greg Abbott has declared a moratorium on all new power grid connections for data centers—at least until developers provide more information about their projects’ potential impacts on the grid and communities.

The Republican governor directed regulators in an August 3 announcement at the Public Utility Commission of Texas and the grid operators at the Electric Reliability Council of Texas (ERCOT) to perform a “comprehensive verification and audit of all data centers advancing through ERCOT’s interconnection process.” As an independent system operator, ERCOT oversees a power grid that operates separately from the rest of the United States and provides services to most of Texas.

Texas has aggressively courted data center development with its availability of cheap land and relatively abundant energy resources, along with offering state incentives, like tax breaks and fewer regulations. That puts the state on track to surpass Virginia in becoming the largest US data center market.

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