Texas’ grid operator, ERCOT, had 474 GW of new large customers in its queue by June 2025—over 90% data centers—leading to a freeze on all new permits. Developers routinely submitted speculative projects across multiple sites, many without customers, overwhelming planners. ERCOT cannot distinguish real proposals from noise, risking ratepayer-funded upgrades for projects that never materialize.
Community concerns over noise, water, emissions, and rising power bills also fueled backlash. Only 28 of 377 companies responded to a state survey on resource use. In Hood County, commissioners were asked to approve a tax waiver for “Project Patriot” without knowing the company behind it.
While code names are common during site selection, tax breaks require transparency. The political climate, including the upcoming election, adds pressure, but the core issue is grid capacity. Unlike a decade ago, when utilities had spare network capacity, the grid is now stretched thin.
New large loads or generators require upgrades. Buyers previously relied on financial contracts and firm power from nearby plants, but regulators like FERC and PUCT now scrutinize colocation deals—where data centers draw power directly from adjacent plants before it hits the grid. For example, Amazon’s deal with Talen’s nuclear plant was rejected by FERC for potentially dodging grid fees.
Cyrus One’s 760 MW campus beside Constellation’s gas plant was approved only with a 30-minute load-shed requirement. Two Crusoe data centers near a wind farm faced similar conditions. Interconnection studies are now critical, as power flows across all connected paths, and transmission congestion rights markets exist.
The pause reflects a broader reckoning: Texas must balance AI growth, industrial revival, and grid reliability.
Source: Hacker News · Summarized by HeadlinesBriefing