Overview
- On June 10, Governor Greg Abbott directed the Public Utility Commission and ERCOT to produce a joint memo by July 17 and to take action by July 31 so that residential ratepayers do not pay for transmission and interconnection costs created by new data centers.
- Abbott asked the Legislature to consider 2027 bills to require new centers to add power generation capacity, use closed-loop water cooling, file annual electricity and water reports, and repeal data-center sales tax exemptions.
- ERCOT has logged an unprecedented backlog of large connection requests totaling about 439 gigawatts, roughly 89% tied to data-center projects, a volume far above Texas’s existing peak demand even though many proposals may never be built.
- Local officials and residents in rural counties have pushed for moratoria and protested noise, water use and infrastructure strain, exposing gaps in county zoning powers and increasing political pressure on state leaders.
- Industry groups said they will work with regulators while warning that heavy new costs or rules could deter investment as Texas balances courting AI-era projects with protecting ratepayers, water supplies and local services.