The Governor of Texas (United States) has instructed the state’s environmental regulator Texas Commission on Environmental Quality (TCEQ) to suspend all permits related to data centres until the Electric Reliability Council of Texas (ERCOT) completes an audit of the existing data centre interconnection queue seeking access to the state’s power grid (Office of the Texas Governor statement 21/09/2026). “Because the Public Utility Commission of Texas (PUCT), ERCOT, and the Texas Water Development Board (TWDB) require that information to make informed decisions, no state agency shall move forward with regulatory approvals related to data centre development until it is acquired” according to the statement.
The audits were initially ordered by the governor’s office in August 2026, when the governor also introduced a moratorium on new data centre grid-connection approvals. The latest directive extends this moratorium to environmental permits issued through the TCEQ.
The audit will examine all data centre projects currently going through ERCOT’s interconnection process, with the aim of ensuring that their development does not undermine the reliability of the Texas power grid or expose the state’s natural resources to risks. Data centre projects will be required to cover the full cost of their electrical infrastructure, contribute to lower residential electricity bills, and successfully complete the ERCOT audit. They will also be prohibited from using water required by local communities, required to report their electricity and water consumption, and required to comply with setback requirements designed to protect the communities where they operate, added the statement.
Texas is experiencing a sharp increase in power demand as data centres and other large electricity consumers expand throughout the state. The ERCOT, which operates the state’s power grid, is currently reviewing around 474 GW of grid-connection applications, with 90% of them relating to data centres, as Bloomberg recently reported.
Texas is also moving in line with several other US states seeking to slow the pace of data centre development. Two weeks ago, the Governor of Massachusetts issued an executive order requiring developers of data centres with peak electricity demand above 25 MW to invest in their own clean power generation and obtain local approval before submitting applications for state construction permits (KEI, 11/09/2026).
The rapid expansion of data centres has become a prominent issue in the 2026 US midterm election, as local opposition continues to grow, particularly over concerns about the impact on electricity bills.
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