---
title: Texas Pauses New Data Center Grid Connections Until Projects Clear a State Audit
description: Texas has paused new data center grid connections while regulators audit each project's power, water, incentives and ownership. Six developers have signed up.
author: Darie Nani (Editor-in-Chief)
updated: 2026-08-08T19:24:03.479Z
canonical: https://www.sovereignmagazine.com/article/texas-data-center-interconnection-pause-audit
image: https://cdn.nanimediahouse.com/texas-data-center-grid-audit-120283.webp
categories: Politics
content_type: News
region: Texas
publication: Sovereign Magazine
schema_type: Article
---

Texas has stopped moving new data centers through its electric grid connection process until state regulators finish auditing every project waiting in line. Governor Greg Abbott directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas, which runs the state's grid, to pause all pending data center interconnection requests until each one completes a comprehensive review. A project that fails the review is denied a connection outright.

The order applies to a queue far beyond anything the Texas grid has handled before. ERCOT is considering [requests for roughly 474 gigawatts of new connections](https://gov.texas.gov/news/post/governor-abbott-directs-comprehensive-data-center-audit), more than five times the state's record peak electricity demand, according to the governor's office. About 90 percent of those requests come from data centers.

## Five Disclosures Have to Clear Before a Project Connects

The PUCT and ERCOT are reviewing each project against [five categories of information](https://gov.texas.gov/news/post/governor-abbott-announcesskyboxdigital-realtymara-commit-to-comply-with-his-data-center-standards). Developers must disclose any taxpayer-funded incentives, grants or abatements tied to the project; their projected electricity demand and any plans to generate power on site rather than draw it all from the ERCOT grid; their water sources, projected water use and water-efficient cooling technology; the steps they are taking to limit effects on neighboring property owners, including noise, lighting, setbacks, traffic and emergency response coordination; and who owns and controls the project. Regulators must receive and audit all five before a project can move forward.

"The PUCT and ERCOT cannot make decisions to guarantee grid stability and reliability based on substantially incomplete information," Abbott said.

> "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. Simply put, Texans must come first."
> — Greg Abbott, Governor of Texas

## Regulators Were Already Under Orders to Protect Ratepayers

The audit builds on instructions Abbott gave the two bodies in June, in a letter to PUC Chairman Thomas Gleeson and ERCOT CEO Pablo Vegas. He told the commission to require data centers to fund the full cost of the electric infrastructure their operations need, so those costs do not land on residential ratepayers, and to start work on reducing the transmission costs households pay. "Data centers must operate in ways that reduce costs for residential electricity customers, do not drain water needed for our communities, and take into consideration the needs of our neighborhoods," Abbott said. He has said he intends to work with the legislature to write the protections into state law.

## Six Developers Have Agreed to the Standards and One Has Walked Away

Skybox, Digital Realty and Mara have told the governor's office they will comply. Amazon sent a letter committing to work with the state on the standards. Google said it welcomed them and would work with state leaders to keep data centers from raising costs or straining resources. QTS said it would comply and work with regulators, utilities and local communities. Diode is the one company named so far as having failed to meet the standards, and it will not go ahead with a proposed data center in Henderson County as a result. Other developers have been writing to the governor's office as well: Montera Infrastructure told Abbott it uses closed-loop water systems and funds its own interconnection costs in full.

## FAQ

**Q: Are new data center projects in Texas actually stalled?**
Yes. The PUCT and ERCOT have paused all pending interconnection requests from data centers until each project completes the state's audit.

**Q: Who manages the interconnection queue in Texas?**
ERCOT, the Electric Reliability Council of Texas, operates the state grid and manages the queue. The Public Utility Commission of Texas regulates it and is running the audit alongside ERCOT.

**Q: What happens to a project that fails the audit?**
It is denied connection to the Texas grid, which in practice ends the project at that site.

**Q: What has to be disclosed about water use?**
Water sources, projected water use, water reuse procedures, and the cooling technology the site will use, including whether it is air-cooled, closed-loop or another water-efficient system.