The governor of Texas, Greg Abbott, has directed the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to undertake a comprehensive audit of all data center projects currently advancing through ERCOT’s interconnection process.

According to the governor's office, the PUCT and ERCOT will have to complete the audit before any data center project is advanced. It said that if any project fails to comply with the set requirements, it will subsequently be denied access to the grid.

“Our top priority is to protect Texans’ safety and quality of life,” said Abbott. “Any project that fails to comply with the requirements set forth by the PUCT and ERCOT, and by state law, must be denied connection to the Texas grid. Simply put, Texans must come first.”

Texas is fast becoming a new hotspot for data center development. At present, ERCOT is considering more than 474GW of connection requests, which is more than five times the state's record peak electricity demand. Of that capacity, approximately 90 percent is attributed to data center load.

The latest directive builds on Abbott's call in June for the PUCT and ERCOT to take immediate steps to protect residential ratepayers from the costs of data center expansion.

As part of the audit, the PUCT and ERCOT have been instructed to gather information detailing the extent to which data centers are paying their own way or, depending on the state, the extent to which they are providing their own power or relying on the grid, the extent to which they are bringing their own water supplies and/or reusing water rather than relying on local communities, whether they are using measures to reduce impacts on neighboring property owners and communities, and finally information detailing the ownership and controlling interests in the project.

The directive closely follows the approval of a new connection process proposed by ERCOT in June. Under the new framework, projects will enter a batch, with ERCOT studying the eligible projects to determine grid needs and capacity. Subsequently, transmission capacity will be allocated based on what the grid can support, with ERCOT then developing and publishing a transmission plan identifying necessary upgrades.

According to officials, the new batch process is the first instance of an independent system operator adopting such rules for large-load users. The framework is expected to act as a foundational model for a broader process to be developed with stakeholders later this year.