Texas has paused approvals for new data centers seeking connection to the state's electric grid while regulators conduct a comprehensive audit of proposed projects.

Governor Greg Abbott issued the directive in early August, directing the Public Utility Commission of Texas and the Electric Reliability Council of Texas to verify details on power use, water consumption, ownership, tax incentives, and community impacts before any further large-load interconnections advance. The move followed a voluntary survey where fewer than 16 percent of data center operators responded with usage information.

ERCOT's interconnection queue stood at more than 474 gigawatts of requested large-load capacity as of mid-2026, with data centers accounting for roughly 90 percent of that total. The figure exceeds the grid's all-time peak demand record of about 91 gigawatts by more than five times. Officials cited risks to reliability and the potential for costs to shift onto residential ratepayers.

The pause applies to projects expecting grid power allocations and does not affect facilities planning on-site generation. Industry analysts have warned of delays that could affect dozens of gigawatts of planned capacity and billions in investment.

Local governments across the state have also taken steps to restrict data centers. Several cities and counties implemented moratoriums or zoning changes in recent months amid resident complaints over noise, water demands, and land use. Republican leaders including Attorney General Ken Paxton have voiced support for slowing the pace to address constituent concerns.

Texas had positioned itself as a leading destination for data center development due to available land, lower costs, and a historically permissive regulatory environment. Major projects from companies including Meta and Oracle had advanced in the state before the recent scrutiny.

The audit process is expected to determine which projects meet verification standards for grid connection. Projects failing to comply face denial of access to ERCOT infrastructure.