Texas Reviews Data Center Plans Amid Power Grid Concerns

2026-08-11

Applications exceed five times power demand

Texas Governor Greg Abbott, a Republican, on the 3rd ordered a comprehensive audit and review of data center construction plans still in their early stages. Applications from data centers and other facilities seeking connections to the state's power grid have exceeded 474 gigawatts. He also indicated that projects would be scrutinized and rejected if deemed inappropriate.

At 474 gigawatts, the applications far exceed the approximately 260 gigawatts of total generating capacity at Japan's power plants and represent more than five times Texas' overall electricity demand. Some projects are believed to be speculative applications for grid connections that have moved ahead without substantive development. Meanwhile, if connections proceed as planned, the stability of the state's power grid could be undermined and electricity rates could surge.

The state will examine how concrete the plans are. It will check whether data centers are developing their own power-generation facilities, adopting systems to reuse water for cooling and how far funding has progressed. Projects deemed inappropriate will be rejected.

Trump voices unusual discontent

U.S. President Donald Trump expressed unusual dissatisfaction with Abbott's policy in a video interview with U.S. online media outlet Punchbowl News on the 7th. 'The other day, it looked like Texas was opposed to data centers. I think that's wrong,' he said, arguing that 'there are places that welcome data centers, and large amounts of money flow into those communities.'

The backdrop is believed to include Trump's view that he has resolved the issues surrounding data centers. In late July, Trump highlighted that he had expanded to more than 220 companies the 'Power Customer Protection Pledge,' under which companies would bear increases in electricity rates resulting from data center construction, after bringing utilities and others together in Washington.

However, the pledge has loopholes. Although companies have promised to pay rates under the pledge, it contains no provisions establishing obligations or penalties. The Brookings Institution in the United States has said that states and public utilities should establish policies to protect residents who pay the rates.

Governor emphasizes cooperation with tech giants

After receiving unexpected opposition from Trump, Abbott on the 10th issued a press release saying that U.S. companies OpenAI and Meta, which have data center construction plans, had each endorsed his directives. He appeared to be emphasizing that he was working with major technology companies and did not intend to reject data centers across the board.

According to a Gallup poll conducted through May, seven in 10 Americans opposed data center construction in their local areas. The issue is also one of the major points of contention in the U.S. midterm elections in November. As opposition from residents spreads, it has become an important political issue for Abbott, who is seeking a fourth term.

For Trump, Abbott is a central figure in Texas, a Republican stronghold. If the confrontation between the two deepens, it could cause unrest within Republican ranks.

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