Executive Summary
Governor Greg Abbott has escalated state oversight of Texas data center development twice in eight weeks. On June 10, 2026, Abbott directed the Public Utility Commission of Texas and ERCOT to require data centers to fully fund their own electric infrastructure costs and to identify further ratepayer protections by set administrative deadlines. On August 3, 2026, Abbott went further, directing PUC and ERCOT to pause new data center connections to the Texas grid entirely until both agencies complete a comprehensive audit of each project’s water use, power use, tax incentives, and ownership. ERCOT is currently evaluating more than 474 GW of interconnection requests, over five times the state’s record peak electricity demand. Any project that fails the audit or fails to comply with PUC and ERCOT requirements will be denied grid connection.
What Happened
Abbott’s June 10, 2026, directive, sent in a letter to PUC Chairman Thomas Gleeson and ERCOT CEO Pablo Vegas, required the PUC to ensure data centers fully fund the electric infrastructure needed to serve their operations, preventing those costs from being passed to residential ratepayers. PUC and ERCOT were directed to submit a joint memorandum to the Governor’s office by July 17, 2026, identifying additional actions to protect residential and small business ratepayers, and the PUC was separately directed to…
