Companies that build data centers are lining up to express how their projects in Texas align with Gov. Greg Abbott’s standards for data center development. Meta, Google and OpenAI are among the largest companies that said they will comply with standards intended to prevent data center development from draining the state’s energy and water, increasing prices and disrupting rural communities.
“We’re seeing the floodgates open of data centers across the state, companies I’ve never heard of before, saying they will fully comply with the standards that I’ve established,” Abbott said Monday at a press event in Austin.
Political pressure over data centers is growing nationwide. And in Texas — now the fastest-growing market for the hangar-sized warehouses holding computers that power artificial intelligence tools — elected officials on both sides of the aisle view data centers as a defining issue for the midterms.
There are currently 474 gigawatts of requests from facilities that want to connect to the grid. That’s nearly five times the grid’s all-time peak energy demand, and 90% of the requests are from data centers, according to Abbott’s office.
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Texas Agriculture Commissioner Sid Miller, a Republican who is not seeking reelection, has been raising alarm over the consequences for his party as data centers become increasingly unpopular.
“We’re going to get our ass kicked, we really are if we don’t get on this. We should own this issue,” Miller told Straight Arrow in July.
What is data center policy in Texas?
In June, Abbott made his first official statement acknowledging potential problems with Texas’ newfound status as a data center mecca.
“The rapid scale of data center development requires oversight to ensure everyday Texans are not burdened with the costs,” Abbott wrote in a June 10 letter to the Public Utilities Commission of Texas (PUCT) and the state’s power grid operator, the Electric Reliability Council of Texas (ERCOT).
Abbott, long known for his pro-business agenda, called for data centers to meet several demands: Pay for new power infrastructure; add new power sources to the grid; use water-efficient technologies; report annual water and power data to the PUCT; and mitigate impacts, such as excessive noise, on neighboring communities.
On Aug. 3, Abbott announced a “comprehensive verification and audit” of all data centers looking to connect with the ERCOT power grid. Any project that failed to meet state requirements would not be permitted to connect to the grid, he said. Abbott has also said he wants new data centers coming onto the grid to help lower electricity bills for Texans.
While Abbott did not describe his policy as a moratorium on data centers, his announcement said no projects can move forward until the audit is complete.
President Donald Trump has called Texas’ pause on connecting data centers to the grid a mistake. In a Friday interview with Punchbowl News, Trump said “data centers could be bigger than oil” for the Texas economy.
Trump has outlined a similar set of standards for data center development in the nonbinding Ratepayer Protection Pledge, which has been signed by dozens of tech firms and over 100 power providers. That pledge, which was also signed by Abbott and 22 other Republican governors, does not involve any clear verification requirements before a project can connect to the grid.
How is Big Tech responding?
Over the past week, several data center developers have announced they will comply with Abbott’s data center standards.
“AI infrastructure should pay its own way, support a reliable grid, use water responsibly, protect neighboring communities and operate with transparency and accountability,” Uday Ruddarraju, chief technology officer of compute at OpenAI, wrote in a letter to Abbott.
In a press release, Meta said it supports Abbott’s audit and “efforts to protect ratepayers, conserve water and promote responsible data center development in Texas.”
Mara Holdings, a major cryptocurrency mining company in Texas, also issued a statement of its intent to comply with Abbott’s standards. Amazon, Google and at least seven lesser-known data center companies have also publicly expressed they will follow Abbott’s standards.
Announcing compliance, however, is no guarantee of passing an audit. Each project must complete the PUCT and ERCOT’s review process. The exact details on how the regulatory agency and grid operator will complete the audit are unclear.
An ERCOT spokesperson told Straight Arrow that the grid operator is seeking approval from the PUCT to pause the process of connecting data centers to the grid.
“The audit and verification process has not started yet,” Rich Parsons, communications director at the PUCT, told Straight Arrow in an email. “All data centers will have to respond to questions related to their eligibility to be interconnected in ERCOT.”
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