Texas Freezes Data Center Approvals to Audit Grid Load

Governor Greg Abbott directed a freeze on new data center interconnection approvals in Texas to facilitate an audit of a 474-GW queue that currently exceeds the state's peak demand record. The move aims to eliminate speculative projects, or tire-kickers, that threaten grid reliability as AI infrastructure expands.

The Public Utility Commission of Texas and the Electric Reliability Council of Texas are revising forecasting methodologies to ensure capacity is reserved for legitimate projects. This effort follows the implementation of Senate Bill 6 to regulate large-load customers. Other states have adopted similar restrictive measures, with Florida requiring data centers over 50 MW to cover full connection costs and Montana proposing tariffs for larger loads.

Nationally, utilities are increasingly requiring upfront infrastructure payments and minimum contract durations through large-load tariffs. While some analysts report that labor shortages and community opposition have already stalled over $170 billion in capacity, grid operators warn that significant investment remains necessary to prevent systemic reliability risks. This caution follows a 2024 transmission fault in Virginia that caused 1.5 GW of data center load to trip offline.