The agencies that run the Texas power grid have told Governor Greg Abbott they need new legal authority to keep the state’s data-center boom from raising electric bills and threatening reliability — and, in one recommendation, to stop a hostile foreign government from using a data center to disrupt the grid.
The Public Utility Commission of Texas laid out the recommendations in a July 17 letter to the governor from its chairman, filed publicly on Monday, that it developed with the Electric Reliability Council of Texas — the agency that manages the flow of power to most of the state.
The memo is in response to a June 10 directive in which Abbott ordered the two agencies to make data centers “fully fund” the cost of the power lines and substations built to serve them, rather than passing those costs to households, and to report back by July 17 on what more they could do.
PUC Chairman Thomas Gleeson, in his letter to the governor, wrote that “I share your view that these projects must be managed in a way that protects residents by prioritizing affordability, reliability, and the interests of Texas communities,” adding that the state “should welcome responsible economic development, but it must do so in a manner that prioritizes affordability, reliability, and the interests of the residents who depend on the grid.”
The commission asked the Legislature for three changes when it convenes in January 2027. First, it wants clearer authority to set reliability rules for large power users — including letting ERCOT send an emergency order to cut a data center’s power, known as a curtailment, directly to the operator rather than through its local utility, a change the commission said would improve ERCOT’s ability to manage the grid in real time.
Second, it wants to require large computational loads to register with both the PUC and ERCOT and hand over technical details about their facilities, so the grid operator has accurate information about their reliability impact. Third, and sharpest, it wants to expand the Lone Star Infrastructure Protection Act, the 2021 law that bars companies owned or controlled by China, Russia, Iran or North Korea from deals that would give them access to or control of critical Texas infrastructure, including the power grid.
That ban now reaches only the owners of generation and transmission registered with ERCOT; the commission wants it extended to the owners of data centers, warning that “foreign state actors could also maliciously use large computational load facilities to negatively impact the ERCOT grid.”
Those recommendations lean toward keeping large power users from simply drawing down shared grid capacity and, in the foreign-ownership proposal, keeping control of that infrastructure in U.S. hands. The friction is also local: a Hill Country groundwater district asked lawmakers this year for authority to deny data-center water permits.
Gleeson’s letter also listed steps the agencies say they have already taken under existing law, most aimed at “large loads,” the regulators’ term for any facility that needs more than 75 megawatts — a category dominated by data centers. They include a rule barring new data centers from pulling megawatts already committed to the grid, a report recommending that data centers pay for the infrastructure that serves them, a new ERCOT planning process that estimates how much load a given location can reliably carry in a given year, and a rule setting the minimum requirements a utility must meet before adding a proposed new large load. Much of that authority stems from Senate Bill 6, the large-load law the Legislature passed in 2025.
The stakes are large and growing. Texas has 335 operating data centers and 247 more planned, according to KXAN. A June University of Texas/Texas Politics Project poll found 56 percent of 1,200 registered voters oppose a data center in their own community, with 42 percent “strongly” opposed and 29 percent in support.
The recommendations now move toward the Capitol, where the Senate Business and Commerce Committee — which Lt. Gov. Dan Patrick charged with weighing data-center growth against water supplies, property rights and community impact — has set a July 29 hearing on the state’s large-load boom and its rollout of Senate Bill 6.
The commission, meanwhile, said it has already opened a rulemaking this month to shift the cost of connecting large loads off residential bills, with a final decision due by a December 2026 statutory deadline.