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Texas Governor Orders Comprehensive Audit of Data Center Projects Seeking ERCOT Grid Access

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Texas Governor Greg Abbott on Monday directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas to conduct a "comprehensive" verification and audit of all data center projects seeking connections to the ERCOT grid before they are allowed to move forward.

In a letter to the PUCT and ERCOT, Abbott said the grid operator is currently considering about 474 gigawatts of interconnection requests.

Abbott said this is over five times ERCOT's record peak electricity demand, with data centers accounting for roughly 90% of the proposed new load.

"That unprecedented load growth could endanger the reliability and stability of the Texas electric grid," Abbott said.

Abbott said all data center projects advancing through ERCOT's interconnection process must undergo a comprehensive verification and audit before receiving approval to proceed.

Projects that fail to comply with PUCT, ERCOT and state law requirements must be denied connection to the Texas grid, he said.

The governor said some data center developers had failed to fully respond to the PUCT's survey under the General Appropriations Act, prompting the need for a comprehensive verification.

The audit is based on Abbott's June 10 directive instructing the PUCT and ERCOT to collect additional information from developers.

Under the earlier instructions, projects must disclose their financial structure, including any state or local tax incentives, grants, abatements, or other public financial assistance received or expected. Details of ownership and controlling interests also must be provided.

Project developers must also provide information on power and water needs, including projected annual and peak electricity demand, and whether the facility will rely on on-site generation or the ERCOT grid, and any plans to reduce grid demand.

Additional disclosures include projected water use, supply sources, reuse practices, cooling technology, and measures to mitigate impacts on neighboring communities.

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