On August 3, Governor Abbott told the Public Utility Commission and ERCOT that no new data center could connect to the Texas grid until the state audits every project in the queue. He was right to do it.
Texans should also be clear about what he accomplished. He bought Texas time and created an opportunity to find a solution that works for all Texas families.
Look at what forced his hand. ERCOT is holding more than 474 gigawatts of connection requests. That is five times more electricity than Texas has ever consumed at one time, even on the hottest day of summer with every air conditioner in the state maxed out. Virtually all of that new demand comes from data centers. ERCOT projects electricity demand could double over the next decade because of a single industry.
An audit, while helpful, does not change that. An audit produces a spreadsheet.
Abbott’s directive instructs developers to disclose what tax breaks they have received, how much power and water they will use, what cooling technology they plan to install, and who actually owns the project. Those are worthwhile questions. But the most important question is: who will pay for all of this growth and who will benefit?
The answer, of course, is that the customer creating the demand should pay for the cost. Growth should strengthen the grid for everyone, not force families to foot the bill for a private company’s expansion.
Within a day of the governor’s letter, the PUC and ERCOT asked the legislature for more authority. ERCOT has the authority to curtail large loads during emergencies. That helps prevent blackouts. But it does not answer the more fundamental question of who should bear the cost of serving enormous new electricity demand.
The calendar makes the problem more urgent. The audit begins this month with no announced end date. The legislature does not convene until January, and any legislation will take months to implement. Yet ERCOT is scheduled to allocate power to many of these projects next April.
Unless lawmakers act quickly, the pause could end before new rules exist, and the largest wave of new electric demand in state history could be connected under the same policies that created today’s uncertainty.
Texas should welcome growth cautiously and responsibly. But there is a difference between welcoming private investment and forcing working families to subsidize it. The rules should make that distinction unmistakably clear.
The legislature should begin with four principles.
First, every project should pay for all the electricity generation and infrastructure it requires, with absolutely zero costs socialized onto Texas families.
Second, developers should disclose their electricity demand, infrastructure requirements, and ownership before receiving a dime in tax incentives or fast-track connection.
Third, companies should enter a binding agreement with deadlines and penalties for walking away, so abandoned projects do not leave communities paying for infrastructure that is never used.
Finally, projects seeking expedited service should help strengthen the communities around them. As part of new ERCOT rules, Developers should fund home batteries, rooftop solar paired with storage, and demand response at no cost to impacted households. This provides real solutions for families to manage energy bills and have backup power – while bringing real electrons on the grid quickly to help meet this demand.
That final principle turns a conflict into a partnership. Texas should never have to choose between economic growth and affordable electricity. It can have both–but only if wise rules are written before the coming wave of data centers plug into the grid. Governor Abbott’s moratorium has given Texas an opportunity. The legislature should use it. Because if Texas waits until the projects are connected, the debate will be over–and families will be living with the consequences for decades.
Sam Romain is Chairman of Americans for Energy Dominance, a grassroots organization dedicated to securing America’s energy future.