Texas Audits 474 GW Data Centre Queue

Texas Governor Greg Abbott has ordered state regulators and the Electric Reliability Council of Texas (ERCOT) to audit data centre projects seeking grid connections. The review targets a queue of requests exceeding 474 gigawatts, which is more than five times the system's peak demand.

This move addresses a nationwide challenge. Large-load requests for data centres and other major users have surpassed 700 gigawatts across the United States. Many of these projects may never be built, creating planning headaches for grid operators.

Texas Scrutinizes Project Viability

Governor Abbott directed the Public Utility Commission of Texas (PUCT) and ERCOT to verify projects before they advance. The goal is to separate viable developments from speculative proposals. Projects that fail to meet regulatory and legal requirements can be denied a grid connection.

Reuters reported that Texas is the first major data centre hub to halt projects during a review. Regulators seek clearer information about the proposed facilities and the companies behind them. Inflated demand projections could lead to unnecessary infrastructure investment or complicate reliable planning for genuine projects.

National Scale of Speculative Demand

The issue extends far beyond Texas. Alongside the 474 GW in Texas, approximately 270 GW of additional large-load requests have accumulated in other parts of the country. The combined total exceeds 700 GW.

The rapid increase is largely driven by proposed data centres for artificial intelligence and cloud computing. As developers compete for power and sites, utilities are implementing stricter requirements to identify committed projects.

Utilities Impose Financial Requirements

To filter out uncertain proposals, utilities in several regions are introducing upfront costs and commitments. AEP Ohio, for example, requires large data centre applicants to complete a formal process and pay load-study fees. The utility also requires qualifying customers to provide financial commitments under its data centre tariff.

AEP Ohio said its revised process has helped filter out more speculative projects. This allows for more reliable estimates of future electricity demand. The approach reflects a broader shift toward requiring developers to demonstrate financial and commercial commitment before major grid investments are planned.

The fees at AEP Ohio vary based on the amount of electricity requested:

Data Centre Impact on PJM Capacity Costs

The consequences of growing data centre demand are visible in the PJM Interconnection region. Monitoring Analytics, PJM's independent market monitor, estimated that data centre load growth resulted in a combined $29.4 billion increase in capacity-market revenues across PJM's last four auctions.

This figure represented about 46% of the $63.6 billion in total capacity charges across those auctions. In the most recent auction, data centre demand accounted for an estimated $6.3 billion of the $16.4 billion in total capacity charges.

These figures have intensified debate over whether large new data centres should bear a greater share of the associated infrastructure and capacity costs.

Rethinking Demand Forecasting for AI

The rise of AI infrastructure is forcing electricity providers to reconsider traditional forecasting. Data centres can require hundreds of megawatts, with some proposed campuses designed for gigawatt-scale power. This scale and uncertainty make it difficult to plan for new generation, transmission, and distribution infrastructure.

If forecasts are too high, utilities invest in unused infrastructure. If they underestimate, connection delays and grid reliability pressures follow. Texas and other jurisdictions are therefore moving toward stricter verification, financial commitments, and more detailed project disclosures. The aim is to ensure grid planning is based on concrete demand, not speculation.