Elon Musk's preferred state halts data center approvals; says 'prove' this

Texas Governor Greg Abbott has temporarily halted approvals for new data centers seeking to connect to the state's electric grid. The order, directed to the state's regulators, mandates a comprehensive audit before any projects can move forward. This decision comes as Texas, where Elon Musk has encouraged businesses to relocate and where Tesla has its headquarters, grapples with the rapid expansion of data centers. Musk urged Texas agencies to freeze new H-1B visa petitions, prioritizing Texans in job placements.

Developers must now prove details such as projected electricity and water use, tax incentives, cooling operations, ownership, and impact reduction efforts on local communities. Projects that fail the state's verification and audit will be denied connection to the Texas grid. Abbott emphasized that Texans must come first in terms of safety and quality of life.

The move aims to address concerns over the industry's electricity use and water consumption. Approximately 90% of the 1,800 projects waiting for grid connections come from data center projects, representing over 474 gigawatts of electricity demand. Texas Governor Greg Abbott's directive may impact ERCOT's ongoing changes to its interconnection process, including the review of projects under phase "batch zero."

The Texas Public Utility Commission and the Electric Reliability Council of Texas will work together to implement the governor's directives, but the scope of the audit remains unclear.