Texas governor orders audit of data center projects, Baird comments

Investing.com -- Texas Governor Greg Abbott has directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas to conduct a comprehensive verification and audit of all data centers advancing through ERCOT's interconnection process.

ERCOT is currently considering approximately 474 GW of requests to connect to the Texas grid, with roughly 90% of the new power requests coming from data centers.

The audit will require data center projects to provide information across several areas. These include financial details on whether projects are paying their own way or depending on state assistance, power sourcing information, water usage and reuse practices, and measures taken to reduce impacts on neighboring communities such as noise mitigation and traffic improvements.

Baird analysts noted that this regulatory review adds time, expense and potential risk for 2027 project starts. The firm pointed out that this development is occurring in one of the most development-friendly states.

Separately, Wood Mackenzie reported that developers added 36 GW of new data center capacity in the first quarter of 2026, down 19% from the fourth quarter of 2025. This marks the second consecutive quarter of slower growth, following a peak of more than 60 GW in the third quarter of 2025.

According to Wood Mackenzie, data center developers are prioritizing existing project pipelines as development and regulatory challenges become more complex. Texas remains the largest planned project market with 100 GW, followed by Ohio, New Mexico and West Virginia.

You May Also Be Interested In

• S&P Dow Jones Indices adds Bloom Energy to S&P 500 index
• Starlo to acquire Mexico silver project in reverse takeover deal
• General Dynamics wins $249m in US military contracts