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Texas halts new data center connections amid electricity demand concerns
Governor Abbott's freeze puts roughly 20% of the US data center pipeline at risk, with potential revenue losses reaching $15 billion by early 2027.
Texas just pulled the emergency brake on its data center boom. Governor Greg Abbott ordered the Public Utility Commission of Texas (PUCT) and grid operator ERCOT to stop approving new data center connections on August 3, freezing what had become the largest power-hungry queue in American history.
The reason is almost comically simple: data centers are asking for more than five times the electricity Texas has ever actually used at once. The ERCOT interconnection queue now contains over 1,800 projects requesting a combined 474 GW of capacity. For context, the state’s all-time peak demand, set on July 22, hit 91,089 MW. Roughly 90% of those queued requests come from data centers.
A queue that broke the system
ERCOT responded to Abbott’s order by suspending its Batch Zero interconnection study, which was supposed to send notifications to project developers by August 7. That study was meant to be a first step toward sorting through the backlog. Now it’s on ice until a comprehensive audit of the entire queue wraps up.
The governor framed this as a matter of protecting Texas ratepayers. The concern is that speculative projects, ones that may never actually get built, are clogging the pipeline and distorting how the state plans for future power generation.
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The financial fallout
According to BloombergNEF, Abbott’s freeze puts approximately 49.8 GW of projects at risk of delay. That figure represents roughly 20% of the entire US data center pipeline, concentrated in a single state.
The revenue implications are substantial. BloombergNEF estimates losses between $8 billion and $15 billion by early 2027, depending on how much of the affected capacity involves AI workloads. A scenario where 60% of the delayed projects are AI-related yields the $8 billion figure. If virtually all of them are AI-focused, the number climbs toward $15 billion.
Crypto mining caught in the crossfire
Texas has long been one of the top destinations for Bitcoin mining operations, drawn by the same cheap electricity and regulatory flexibility that attracted AI data centers. The freeze doesn’t distinguish between AI data centers and crypto mining facilities. Any new large-load connection request falls under the halt.