More data centers, companies, announce they will comply with Abbott directive

“I established clear guardrails to ensure data centers protect our electric grid, conserve our water, respect our neighborhoods, and pay their own way,” Abbott said. "They must not pass costs on to Texas families or interfere with their quality of life.”

The governor said the companies were “setting an example of responsible data center development by embracing my standards, and any company that wants to do business in Texas should expect to do the same.” 

On Monday, Abbott issued his second directive ordering the Public Utility Commission of Texas (PUCT) and Electric Reliability Council of Texas (ERCOT) to conduct a comprehensive verification and audit of all data centers advancing through ERCOT’s interconnection process. The agencies must complete the audit before any data center project moves forward, he said.  

ERCOT is currently considering more than 474 gigawatts of requests to connect to the Texas grid, more than five times Texas’ record peak electricity demand for ERCOT. 

The overwhelming majority of new power requests – 90% – are from data centers. 

“That unprecedented load growth could endanger the reliability and stability of the Texas electric grid,” Abbott said.

It’s the second PUCT and ERCOT directive Abbott issued in one month. Last month, he directed the agencies to ensure data centers’ interconnections would result in reduced residential electrical bills and add to Texas’ electric capacity. 

The directives state that the data centers must “pay for their electric infrastructure instead of shifting costs onto Texas families and small businesses, reuse their own water, reduce the cost of electricity for Texans, do not disrupt residential neighborhoods to preserve Texas’ quality of life, and pay their own way and eliminate reliance on outdated taxpayer-funded incentives,” Abbott said.

He also directed the PUCT and ERCOT to pause all pending data center interconnection requests until each project undergoes and successfully completes ERCOT's comprehensive audit.  

The PUCT and ERCOT have been instructed to obtain information about each data center project, including requiring the companies to disclose all taxpayer-funded incentives, grants, abatements, and other public financial assistance the companies have received or applied for. The companies are to explain how they are providing their own power, the projected electricity demand and their “plans for on-site generation or other measures to reduce reliance on the ERCOT grid.”

They are also to explain their plan to “protect Texas water resources by identifying water sources, projected water use, water reuse procedures, and water-efficient cooling technologies” and “outline measures to reduce impacts on neighboring property owners and communities, including noise mitigation, light controls, setbacks, traffic improvements, emergency response coordination, and other community protect measures.”

They are also required to “provide full transparency by disclosing project ownership and controlling interests.”

The PUCT and ERCOT must receive and audit this information before data center projects can move forward. “Any data center company that fails to comply with ERCOT’s audit process will be denied the ability to interconnect to the Texas grid,” Abbott said.

After the first directive was issued, Diode announced it couldn’t meet the standards and dropped its plan to build a data center in Henderson County.

Abbott issued the directives after widespread protests against data center development, especially in rural Texas, and Republican state lawmakers backtracked on a law they previously supported that fast tracked data expansion at taxpayers’ expense. 

Some rural Texans have demanded a special session be called to ban data center expansion in Texas, The Center Square reported.