Texas Governor Pauses All ERCOT Data Center Interconnections Pending Audit
Data center developers, lenders, and investors with projects in the ERCOT interconnection queue must respond to a state-mandated freeze on all grid connection approvals, with non-compliant projects facing permanent denial of grid access.
On August 3, 2026, Texas Governor Greg Abbott directed the Public Utility Commission of Texas and ERCOT to pause all data center interconnection approvals pending a comprehensive audit of projects in the ERCOT queue, which is 90% comprised of data center load requests totaling 474 GW of new power demand. The audit requires developers to disclose all state and local financial incentives, projected peak and annual power and water usage, on-site generation plans, community impact mitigation measures, and full ownership details to verify compliance with grid reliability, water resource protection, and community interest requirements. Projects located outside the ERCOT region or using purely behind-the-meter on-site generation are exempt from the pause. Lenders and investors should underwrite the risk of open-ended approval delays, incorporate cost-overrun protections, and tie funding commitments to audit milestone completion, while all affected stakeholders are encouraged to engage with state regulators promptly to advocate for a streamlined audit process to avoid further interconnection queue backlogs.