ERCOT Audit Sparks Concerns Over Texas Data Center Queue

Texas is set to undergo an ERCOT audit ordered by Governor Greg Abbott, which could impact data centers in the state. The audit will review power draw, on-site generation, water usage, tax incentives, ownership, and community impact of data center projects.

The queue for Texas data centers has grown significantly, with 474 GW worth of pending requests, about 90% of which are from data centers. The highest electricity demand in Texas is 91,089 MW, but the current queue stands at over five times that record peak.

ERCOT's Batch Zero framework was approved on June 18 to study large-load projects under new rules. However, Governor Abbott directed an ERCOT audit on August 3, which has delayed classification notices for data center projects. The PUCT will discuss the matter on August 20, and a decision could determine when ERCOT's Batch Zero process resumes.

Data centers that build their own power generation on-site, rather than drawing from the grid, may be less affected by the audit. However, companies with pending capacity allocations are uncertain about their 2027 timelines, and approved Texas capacity has become scarcer due to the backlog.