Texas has paused approvals for new data centers. Governor Greg Abbott has ordered a temporary halt to approvals for new data centers seeking to connect to the state’s electric grid, He has directed the state’s regulators to complete a comprehensive audit before projects can move forward.The move comes as Texas, the state where Elon Musk has encouraged businesses to relocate and where Tesla moved its headquarters, experiences growing scrutiny over the rapid expansion of data centers. In a post shared in November 2025 on X, Musk wrote “Texans come first. I’m directing state agencies and universities to freeze new H-1B visa petitions. Texas taxpayers invest billions to train our workforce. Those jobs should go to Texans. Texas is the strongest economic engine in America. We’re going to keep it that way.”According to a report by The Texas Tribune, the decision means developers must first “prove” details such as their expected electricity and water use, tax incentives, cooling operations, ownership and efforts to reduce impacts on local communities before receiving grid approval. Abbott said projects that fail the state’s “comprehensive verification and audit” should be denied connection to the Texas grid, adding that “Texans must come first.”
Texas Governor Greg Abbott orders audit of data center projects
In a letter to the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT), Abbott directed the agencies to audit data centers currently advancing through ERCOT’s interconnection queue before any additional approvals are granted. Under the order, developers will be required to disclose:* Tax incentives they expect to receive* Projected electricity demand and power generation* Water consumption and cooling methods* Measures to reduce impacts on surrounding communities* Facility ownership informationAbbott said any project that fails to meet the state’s requirements should not be connected to the Texas electricity grid. He said, “Our top priority is to protect Texans’ safety and quality of life. 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.”
Why Texas is tightening scrutiny
According to ERCOT, more than 1,800 projects are currently waiting for grid connections, representing over 474 gigawatts of electricity demand, more than five times the state’s record peak demand. Abbott said approximately 90% of those new power requests come from data center projects.The governor said the latest audit was prompted in part by low participation in a recent PUCT survey that collected information on data centers’ electricity demand, water use, cooling systems and power sources. The survey is intended to support long-term planning for the state’s energy and water infrastructure.During a June hearing, Rep. Brad Buckley said participation had been limited. Of the 377 companies notified about the survey, 28 submitted responses.
Texas’ data center order may affect ongoing approval process
Abbott’s directive could affect ERCOT’s ongoing changes to its interconnection process, including the review of projects under the first phase known as “batch zero.” While regulators had already begun introducing stricter requirements for large electricity users, ERCOT said it will postpone the transmission planning study currently underway while reviewing the governor’s order.The PUCT said it would work with ERCOT to implement Abbott’s directives but did not clarify whether the audit would apply only to projects under batch zero or all data centers currently in the interconnection queue.Environment Texas, which has called for stronger oversight of data center development, said the governor’s order addresses key issues but urged state leaders to introduce legislation establishing long-term safeguards.Luke Metzger, executive director of Environment Texas, said, “AI has real promise, but it shouldn’t come at the cost of our water, our air, and our neighborhoods. Now that the state is asking the right questions, it needs to use the answers to develop safeguards that protect Texans.”
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