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.
But the recent AI boom and the accompanying frenzy of data center development threaten to overwhelm the Texas grid on paper, despite the state leading the country in adding new power generation. The ERCOT interconnection queue currently includes more than 1,800 projects representing over 474 gigawatts’ worth of requests to connect to the Texas grid—more than five times Texas’ record peak electricity demand—and about 90 percent of those power connection requests come from data centers.
“That unprecedented load growth could endanger the reliability and stability of the Texas electric grid,” according to the statement from Abbott’s office.
Many of those data center projects may never materialize for various reasons. But ERCOT has still forecast that data center demand and other factors could drive statewide electricity demand to double the current demand record by 2032, according to The Texas Tribune.