Texas Governor Freezes Data Center Approvals Amid Power Grid Strain

In a significant move to address the strain on Texas's power grid, Governor Greg Abbott has ordered a freeze on new data center approvals. This decision comes as the Electric Reliability Council of Texas (ERCOT) faces a staggering demand of approximately 91 gigawatts, while developers have lined up over 474 gigawatts worth of projects, predominantly data centers.

On August 3, 2026, Abbott mandated a thorough audit of all data center projects in the interconnection queue managed by the Public Utility Commission of Texas (PUCT) and ERCOT. The review will assess various factors, including power demand projections, water usage, cooling technologies, tax incentives, community impacts, and ownership structures. No new projects will receive approval until this audit is complete.

The situation has escalated rapidly; ERCOT's interconnection queue grew from 410 gigawatts in April to 474 gigawatts by August, with around 90% attributed to data centers. Abbott's directive follows a previous initiative aimed at protecting residential ratepayers from the costs associated with infrastructure upgrades necessitated by these new facilities.

In addition to the freeze, Abbott has outlined five key disclosures that data centers must provide to connect to the state grid. These include details on taxpayer-funded incentives, projected power demand, water sourcing, and community impact measures. The governor emphasized that any project failing to comply with these requirements will be denied a connection to the Texas grid.

This regulatory pause reflects a growing public backlash against the rapid expansion of data centers, with similar actions being taken in other states, including New York, where a statewide moratorium on new hyperscale data centers was enacted in July 2026.