Texas’ power grid operators are calling for state lawmakers to expand their authority to regulate data centers, following a recent directive to rein in these facilities from Gov. Greg Abbott.
In a letter to the agencies last month, Abbott directed the Public Utility Commission of Texas (PUCT) to take action to ensure that data centers lower residents’ energy bills when the facilities connect to the grid and require data centers to pay for the costs of their electric infrastructure.
The governor also directed the commission and the Electric Reliability Council of Texas (ERCOT), which operates the state’s electricity grid, to review their authority and "identify actions that can be taken under those authorities to safeguard Texans, their property, and resources."
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PUCT Chairman Thomas Gleeson responded to the governor's letter this month, outlining the steps the two agencies had already taken to prepare for an influx of data centers to the state. Most of the policies began before the governor's directive and were undertaken in response to a state law passed in the 2025 legislative session.
Gleeson said the PUCT and ERCOT have adopted new requirements for data centers looking to join the grid. He said they've also taken steps to ensure existing power plants continue to provide energy to everyday Texans, even when those facilities will power a new data center.
According to Gleeson's letter, the agencies have also assessed how transmission costs are distributed among consumers and improved their process for forecasting how much energy will be needed to power the grid.
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The PUCT and ERCOT are taking steps to ensure that data centers and other large energy consumers pay for the cost of building the new infrastructure they need to connect to the grid. Gleeson said the agencies are also developing a new program that will encourage data centers to cut back on their energy consumption ahead of "an anticipated electric energy emergency."
"Texas should welcome responsible economic development, but it must do so in a manner that prioritizes affordability, reliability, and the interests of the residents who depend on the grid," Gleeson wrote in his letter to the governor.
Gleeson also outlined potential state legislation he said would help the two agencies to regulate data centers. In particular, he said state regulators should be able to communicate directly with data centers to ask them to cut back on energy usage in an emergency. Currently, ERCOT must communicate with the data center's utility company instead.
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Texas lawmakers should also require data centers and other large energy consumers to register with the state, Gleeson said. And he said data centers should be required to comply with an already existing law that "prohibits agreements that would give certain foreign-linked companies direct or remote access to, or control over, Texas critical infrastructure." That law, known as the Lone Star Infrastructure Protection Act, only applies to power plants and transmission companies.
University of Texas energy researcher Joshua Rhodes said data centers are likely to be a central focus of the next legislative session.
"Data centers are not polling very favorably in public opinion," he said. "And so it'll be an indication that there will be some bills trying to inject some discipline into this market."
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Rhodes said there's been a lot of discussion about how to prevent data centers from passing on the costs of new infrastructure to consumers, but state regulators are still fleshing out the specifics of concrete policies.
"Really, the thing that feels kind of new and feels like it's not fully resolved yet is the concept of how these large consumers of electricity are going to pay for infrastructure that they need, such that it doesn't fall on other folks," he said.
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