Texas Halts New Data Center Projects as ERCOT's Grid Queue Doubles to 474 GW

Texas has slammed the brakes on data center growth. Governor Greg Abbott announced Monday that all new data center projects will need to be audited by both the Public Utility Commission of Texas (PUCT) and the state's grid operator, ERCOT — a response to an interconnection queue that has more than doubled in under six months.

The Numbers

TechCrunch reported on August 4 that ERCOT's interconnection queue stood at 233 gigawatts in January. Today, Abbott's office says, ERCOT is tracking 474 GW of new connection requests — and about 90% of those are data centers. The queue now represents more than five times ERCOT's total peak demand. Many of the projects are paper proposals, the grid operator cautions — developers get in line early because queues are so long — but even a fraction coming to fruition could overwhelm the Texas grid.

Why Texas

Only Virginia hosts more data centers than Texas. Operators including Google and Microsoft have been drawn by the state's ample natural gas reserves, loose regulation, and wind and solar growth — utility-scale solar capacity grew fourfold between 2021 and 2025, according to the Energy Information Administration. Electricity prices in Texas are relatively affordable, but the EIA says data centers and crypto-mining facilities have been pushing them higher.

The Response

Abbott has directed PUCT and ERCOT to collect a range of information from developers applying for grid connections, tightening scrutiny on a sector that had enjoyed a fast lane. Analysts are watching the effects: Bernstein said the audit could actually boost the value of existing bitcoin-mining and AI sites, since a moratorium on new connections would make already-connected capacity scarcer.

Why It Matters

Texas is the test case for a national question: can the power grid keep up with AI's data center boom? With ERCOT's queue now dwarfing peak demand, the state is moving from welcoming data centers to managing them — and every other grid operator with a long interconnection line is watching how the audit plays out.