Texas has stopped telling data centers whether they can plug into the state’s power grid, and no one has said when it will start again.
The Electric Reliability Council of Texas, the agency that runs the grid for most of the state, notified developers and utilities on August 3 that it would miss a deadline it had set for August 7. That deadline was the day ERCOT was supposed to tell each large project, and the utility that would serve it, where it stands in the first round of reviews for very large electricity users. Developers call that round Batch Zero. It is the opening step of the system the Legislature created in Senate Bill 6 in 2025 to bring order to a flood of requests from data centers.
The reason, ERCOT said in Market Notice M-A080326-01, is a letter it received from Gov. Greg Abbott that same day. Abbott directed ERCOT and the Public Utility Commission to verify and audit every data center moving toward a grid connection, and to let no new project advance until that work is finished. ERCOT said it will ask the commission for permission to miss its own deadlines — a “good cause exception,” in the agency’s language — and will make that request before the commission’s open meeting on August 20. Until then, the review stays frozen.
In an August 4 alert to clients, the law firm K&L Gates, which advises data center developers, wrote that the notice had “been viewed as the gating steps many developers were tracking toward closing and financing,” and that pulling it “freezes a step that plenty of pending deals are built around.” The firm’s John C. Crossley and Maria C. Faconti told clients to check whether their contracts tie deadlines, financing or the right to walk away to an ERCOT notice that is no longer coming.
ERCOT is holding roughly 474 gigawatts of requests to connect to the grid, spread across more than 1,800 projects. That is more than five times the most electricity Texas has ever used at once — a record 91,308 megawatts set July 22. Roughly 90 percent of the new demand comes from data centers. Nobody in state government believes all of it will be built.
That is the point. Developers get in line early because a connection can take years, and a line padded with projects that will never break ground distorts the studies that decide which transmission lines get built and which customers pay for them.
Seen that way, the audit is a test of which projects are real. Abbott’s letter asks each developer five questions: whether it is paying its own way or relying on state and local tax breaks, grants and abatements; whether it brings its own generation or simply draws from the grid, and how much power it expects to use in a year and at peak; whether it supplies and reuses its own water or taps the town’s, and what cooling technology it uses; what it is doing about noise, lighting, setbacks, traffic and emergency response for its neighbors; and who actually owns and controls it. A project that brings its own money, power and water can answer all five without difficulty. A placeholder in line cannot.
The fair objection is that no one has said what a passing answer looks like. K&L Gates put it bluntly: the directive “lists what to collect and never says what passes,” offering “no threshold, no score, and no line between a project that clears and one that gets denied.” A freeze with no published standard and no end date holds a fully financed project in the same queue as a speculative one, and it leaves any eventual denial open to the charge that it was arbitrary.
The firm also noted that the governor cannot halt grid connections by himself. The Public Utility Commission is an independent agency, ERCOT answers to it, and any binding action has to come from them — which is why ERCOT is filing a request rather than simply obeying. In July, both agencies told the governor they lack authority in key areas and asked the Legislature to give them more.
The Texas Dispatch reported the audit directive on August 3 and has followed the commission’s work on managing large electricity users under Senate Bill 6.
ERCOT says it will update its notice once the request is filed. Until the commissioners take it up on August 20, every data center in line is waiting on a document with no publication date.