Key facts
- Texas Governor Greg Abbott has ordered state regulators to protect consumers from data center infrastructure costs.
- The directive aims to ensure data center companies cover their own grid infrastructure expenses.
- Abbott also called for policies to reduce residential electricity bills.
- State agencies must present plans to the governor by July 17.
- Six potential legislative policies for data centers were also proposed for the 2027 session.
Texas Governor Greg Abbott has directed state regulators to implement measures that shield consumers from the escalating costs associated with the rapid buildout of data centers, driven largely by AI development. In a letter to the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT), Abbott emphasized the need for oversight to prevent everyday Texans from bearing the financial burden of infrastructure expansion for these facilities.
Abbott's order aims to balance the booming data center market with the needs of residents and communities. He specifically urged the PUC and ERCOT to develop new policies that ensure data center companies cover their own grid infrastructure costs and to work towards reducing residential electricity bills. The state agencies are required to submit a memo outlining their plans and any potential roadblocks by July 17, with a directive to proceed with implementation by July 31.
This move comes as Texas grapples with increased electricity demand and significant water usage concerns related to data centers. Hundreds of data center projects have sought grid connection. The governor also proposed six policy considerations for the 2027 state legislative session, including mandating that data centers cover their infrastructure costs, requiring them to boost power generation capacity, mandating water-efficient technology, and requiring annual reporting of water and electricity usage.
PUC Chair Thomas Gleeson stated that the directive empowers the commission and ERCOT to strengthen consumer protections. The Data Center Coalition expressed its willingness to collaborate with state officials, noting that the industry already adheres to many recommended practices and that decisions are made in coordination with local entities.