Overview
Three Orders, From Grid Access to Every State Permit
On August 3, 2026, Abbott directed ERCOT (the Electric Reliability Council of Texas) and the Public Utility Commission of Texas (PUCT) to verify and audit every data center in ERCOT's large-load interconnection process and to deny a grid connection to any project that fails. ERCOT paused Batch Zero, the SB 6 study meant to sort about 250 to 300 projects of 75 MW or more and roughly 200 GW of prospective load, and canceled its August 7 classification notices. The audit collects each project's tax incentives, grid-supplied and self-supplied power, water use and cooling, community impacts and ownership.
ERCOT's queue held more than 474 GW of large-load requests from more than 1,800 projects, over five times the grid's record peak, with about 90% from data centers. A community-impact review also covers data centers and crypto mines of 25 MW to 75 MW, about 157 facilities and 8,800 MW in an April snapshot. ERCOT set December 10, 2026 to file audit results and has said the Batch Zero study will miss its April 9, 2027 deadline.
On September 14, Abbott directed the Texas Water Development Board (TWDB) to enforce its annual water-use survey against data centers and other major users, refer violators to county or district attorneys, and work with ERCOT on water data. Under the Texas Water Code, an entity that fails to file can be barred from TCEQ permits, amendments and renewals. ERCOT and TWDB surveyed more than 400 data centers, with responses due October 12. See Texas Water Supply Stress.
On September 21, Abbott ordered the Texas Commission on Environmental Quality (TCEQ) to stop issuing all pending and new permits for data center projects until ERCOT finishes, expected in mid-December 2026, and told every other state agency to hold data center approvals. TCEQ said it paused all air and water permits and authorizations for infrastructure directly supporting data centers. The letter also set conditions: projects must cover their electrical infrastructure costs, lower residential bills, stay off water that local communities need and meet setbacks. Abbott will ask the Legislature, which convenes January 12, 2027, to end data center financial incentives.
| Ordered by | Governor Greg Abbott |
|---|---|
| Grid order | Aug 3, 2026: ERCOT and PUCT audit of interconnecting data centers |
| Water order | Sept 14, 2026: TWDB water-use reporting enforcement |
| Permit order | Sept 21, 2026: TCEQ air and water permits, all agencies |
| Audit thresholds | 75 MW+ (Batch Zero); 25 MW+ community-impact review |
| Audit filing | Dec 10, 2026 |
| Outside the grid audit | Self-powered sites, loads outside ERCOT, energized sites |
| Next step | Legislature convenes Jan 12, 2027 |
What it covers
Grid Ties Go Through the Audit, On-Site Power Through the Permit Hold
The August order covered only grid connections, so self-powered campuses and loads outside ERCOT, such as El Paso and the Panhandle in the Southwest Power Pool (SPP), were untouched. The September order reaches them, because on-site gas generation needs a TCEQ air permit wherever it connects, and law firm Bracewell noted it also reaches affiliates building generation mainly for a data center. The order clearly bars final issuance of New Source Review air permits and wastewater permits; its effect on stormwater coverage, standard permits and permits-by-rule, and on technical review, was left unclear.
SB 6, signed June 20, 2025, set the base rules the audit enforces. Loads of 75 MW or more must pay at least $100,000 for a transmission screening study, show site control and financial commitment, disclose duplicate requests and on-site backup generation, share interconnection costs, and accept ERCOT curtailment in emergencies if connected after December 31, 2025. Net-metering deals that place a large load at an existing plant need ERCOT review and PUCT approval. See ERCOT Large Load Interconnection.
| Project type | Aug 3 grid audit | Sept 21 permit hold |
|---|---|---|
| Grid-connected, 75 MW+ | Covered (Batch Zero) | Covered |
| Grid-connected, 25-75 MW | Community-impact review | Covered |
| Self-powered, on-site gas | Not covered | Covered (air permits) |
| Outside ERCOT | Not covered | Covered |
| Already permitted or energized | Not covered | Existing permits stand |
Enforcement
TCEQ Kept Processing Data Center Permits After the Pause
On October 19, 2026, Public Citizen and FracTracker Alliance reported 35 TCEQ permitting actions on data center projects after September 21: 14 permits fast-tracked or assigned to engineers, 11 stormwater coverage approvals, seven certified emissions estimates and three public notices. On September 22 TCEQ mailed preliminary approvals for NRG's Prairie Energy Center, VoltaGrid's ABI-1 power plant and the self-powered Nexus campus at Hubbard, then opened comment periods on two of them. Stormwater approvals went to Caldwell Valley Technology Park, Crusoe's Abilene campus and EdgeConneX's Cedar Creek campus.
Abbott's office said the order covers approval, not processing, and that no permits had been approved. TCEQ interim executive director Steven Schar told the governor on October 19 that covered applications were paused. On October 21 TCEQ shut STEERS, its electronic filing system, which grants stormwater coverage automatically, and began requiring physical filings so staff can screen for data center projects.
Exposure
Which Texas Campuses the Pause Reaches
Campuses already energized, such as the first Stargate Abilene buildings, keep operating; the hold falls on new permits, expansions and new grid load. Fermi America's Project Matador sits outside ERCOT and outside the August audit, but its 5 GW expansion air permit (No. 183462) is held and its August 24 public meeting was canceled. Profiles of each campus are on AI Data Center Exemplars.
| Campus | Power model | How the pause applies |
|---|---|---|
| Fermi Project Matador (Carson County) | Nuclear and gas, outside ERCOT | 6 GW air permit issued Feb 2026; 5 GW expansion permit held |
| Nexus Hubbard (Hill County) | On-site gas | Preliminary approval mailed Sept 22, then paused |
| Crusoe Abilene | Dedicated on-site plant | Stormwater coverage approved after the order |
| AWS GW Ranch (Pecos County) | Off-grid gas | New TCEQ air and water filings held |
| Hut 8 Beacon Point | Grid (AEP Texas) | New grid load under ERCOT audit; new permits held |
| Amp Z Project Lufkin (Angelina County) | Grid plus gas | Oncor load under audit; state permits on hold |
| Sulphur Springs (former MSB Matrix) | On-site gas proposed | Would need an air permit; deed dispute also blocks generation |
| Data City (Webb County) | Islanded, gas to hydrogen | Outside the grid audit; any air permit held |
Record
Dataset Record
- Sources
- Office of the Governor, Texas Tribune, Texas Public Radio, KERA, Pillsbury, Foley & Lardner, Bracewell, Gibson Dunn, MGRID, Water Online, WaterWorld, Public Citizen, FracTracker Alliance, Inside Climate News, The Texas Dispatch, KTRE
- Last verified
- October 2026