Texas data center critics push Abbott for special session on power demand
A bipartisan coalition wants new interconnection rules before ERCOT's queue absorbs another wave of AI load.
A bipartisan group of Texas lawmakers and rural landowners is pressing Governor Greg Abbott to call a special legislative session on data center regulation, arguing the state's grid cannot absorb the roughly 100 gigawatts of potential load now queued at ERCOT. The next regular session does not convene until January 2027, leaving the Public Utility Commission and ERCOT staff to manage interconnection policy without new statutory tools. Critics want either a temporary moratorium on large-load connections or tighter rules on cost allocation and backup generation.5
Abbott's tone has shifted. He called Texas the "epicenter" of AI development last year and courted data center investment. But in a letter to ERCOT CEO Pablo Vegas and PUC commissioners in recent weeks, he struck a more cautious note about the pace and scale of new demand.5
The numbers are stark. Rhodes at the University of Texas said in June (2026-06-11) that roughly 100 GW of data center demand could qualify for Batch Zero — more than ERCOT's all-time peak demand record set in 2023. That batch has largely left the station, Rhodes added, but ERCOT and the PUC will need to drill down on what comes next.3
Texas is not alone in pushing back. New York Governor Kathy Hochul signed the country's first statewide data center moratorium on July 14 (2026-07-14), freezing permitting for new facilities requiring 50 megawatts or more for up to one year.7
Virginia, home to Data Center Alley, has taken a different approach. A bill introduced by a Democrat whose northern Virginia district borders the industry's core would require batteries as the first backup power source, cap diesel generator use at 500 hours per year and permit only the lowest-polluting generators.4
Texas's new rules already shift some risk back to developers. Under Senate Bill 6, any new large load over 75 megawatts connecting after the end of 2025 can be ordered to curtail during grid emergencies. Analysts at Aurora think as much as half of the state's data center capacity could function as a genuine reliability resource for ERCOT by 2030, cutting its own draw when Dallas or Houston need power.6
The carve-out terms carry limits, though. Developers can reduce their grid draw without building firm dispatchable generation, but the ability to shed load during tight hours only works if hyperscalers design their facilities for the job. It does not replace the need to build or buy firm capacity the rest of the time.6
Google already has a foot in the door. The company launched a 1-GW-plus co-located data center and generation complex in the Texas Panhandle in early June (2026-06-04), though it did not disclose the facility's total compute load or peak demand draw.2
The investment flows show where capital sees value. Fluence Energy shares surged 98.2% the week of May 8 (2026-05-08) after the company disclosed master supply agreements with two hyperscalers and a record $5.6 billion backlog. The stock has since given back ground and trades roughly 39% below its highs year to date, but CEO Arun Narayanan said "the operational discipline and margin profile we established in 2025 are proving durable."1
Abbott has not called a special session. If he waits until January, another tranche of interconnection requests could clear the queue under existing rules — and the window to tighten requirements before the next demand wave lands on ERCOT's books will have closed.5