Texas House panel begins to scrutinize data centers
Apr 09, 2026
Texas is becoming a nationwide leader in data centers, the physical footprint that houses the internet. However, the state’s largest energy grid is struggling to keep up with the number of new projects trying to connect to the grid. Some leaders are concerned that energy costs will increase.
Vote
rs across the country are telling their local officials they are skeptical of the large data centers being constructed in their communities. The Texas House Committee on State Affairs has begun the process of investigating what’s going on around the state.
Take this striking statistic: companies want 410,000 megawatts of energy to build “large load” facilities like data centers, according to ERCOT leaders. That’s enough to power more than 100 million residential homes, according to what ERCOT staff has told NBC DFW in the past, that it takes a megawatt to power roughly 250 residential homes.
ERCOT CEO Pablo Vegas said that keeping up with demand is a significant challenge.
“We have seen some significant challenges to the old way of connecting loads into the ERCOT grid based on the volume and the pace of change that is happening,” said Vegas.
ERCOT’s solution is to stop approving individual data centers. In the summer, they will begin their “batch” approval program, which will approve a set of projects each year. This approach is intended to make growth easier to manage and prevent strain on the grid.
Vegas explained, “Then next year, we would run another batch. Then the subsequent and subsequent. We would do that year in and year out.”
However, some data center companies expressed concerns that the “batch” program could serve as a de facto moratorium, potentially preventing the approval of projects that don’t meet the criteria. That was the concern from the leader of the new Stargate project near Abilene.
Some argued that this could limit the technology people rely on every day.
Dan Diorio from the Data Center Coalition said, “Datacenters are the physical foundation that supports this growth, including mission-critical servers relied on by hospitals, government agencies, police officers, firefighters, and other emergency responders.”
With sensitive topics like energy and water at stake, lawmakers were informed that they would have to wait until the summer for an official plan.
Representative Senfronia Thompson asked, “I realize that Texas thrives on business. We’ve got to have business. How is that going to impact my constituents in terms of water availability?”
Thomas Gleeson from the Public Utility Commission responded, “Yes, ma’am. We are working at the commission right now to find that answer.”
There is still quite some time before lawmakers can change any laws in the state. Lawmakers return to the Capitol for their 140-day regular session in January of next year.
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