Texas hits pause on 1,800 data center projects to scrutinize power and water demands

Texas has temporarily halted the approval process for over 1,800 data center projects, prompting a comprehensive review of their power and water demands. Governor Greg Abbott mandated the Public Utility Commission of Texas and ERCOT to halt approvals until they complete an audit of the applicants, aiming to safeguard Texans' safety and quality of life.

The state demands detailed information from the projects, including tax break specifics, power and generation data, water usage, cooling strategies, community impact mitigation steps, and ownership details. Projects failing to meet these requirements will not be permitted to connect to the grid. The review follows a survey where only 28 out of 377 data center firms responded to PUCT's request for information on power and water usage.

While the order isn't a statewide ban, it significantly impacts a bulk of the projects in ERCOT's queue. Approximately 1,800 projects are awaiting approval, with around 90% being data centers, collectively requiring 474 gigawatts of power, far exceeding ERCOT's current peak demand. However, the directive doesn't apply to data centers outside ERCOT's jurisdiction or those with their own power generation.

The move has drawn criticism from some quarters, with Texas Agriculture Commissioner Sid Miller labeling the directive as "all hat and no cattle," and State Rep. Gina Hinojosa dismissing it as too little, too late. Despite these criticisms, the pause adds a significant hurdle for developers in an industry that thrives on rapid buildouts and substantial power demand.