By John Ainger | Updated on Jun 10, 2026 at 06:32 PM
Texas Governor Greg Abbott called on state regulators to better protect ratepayers from shouldering the costs of the data center buildout, the latest sign of growing political scrutiny over the AI-driven surge in electricity demand.
“The rapid scale of data center development requires oversight to ensure everyday Texans are not burdened with the costs of infrastructure driven by data center expansion,” Abbott said in a letter to the Public Utility Commission of Texas, PUC, and the Electric Reliability Council of Texas, or Ercot, which manages the grid. “More must be done to protect Texans.”
Texas is grappling with an enormous data center queue as the state faces almost 300 gigawatts of projected demand for power by 2032. Meeting those needs risks sending power bills spiraling higher. And even in a state that prides itself on being pro-business, there is growing concern that it will be consumers on the hook for infrastructure costs.
Read More: Texas Grid Issues Dramatic Power Demand Growth Projection
Grids across the US are under immense pressure from state legislators to both speed up data center connections, but also to keep energy prices low. Ohio, for example, will pause incentives for future data center projects, following a directive from the governor to halt the tax credits while a committee studies the impact of the projects on the state’s economy. Pennsylvania Governor Josh Shapiro has also heavily criticized the growing costs of building data center infrastructure to ratepayers.
The Texas governor’s move comes after Ercot earlier this month voted in favor of a new “batch” approach to approve data center connections, further underscoring that US grid operators are having to adapt to the AI boom. The PUC will consider that approach at a meeting next week.
Abbott said the regulator must require data centers to fully fund costs of electric infrastructure needed to serve their operations and initiate action to reduce residential ratepayers’ transmission costs by July 31. Connecting data centers to the grid should result in lower bills, Abbott added. Both institutions are requested to submit a Memorandum of Understanding by July 17 in order to implement those goals.
Abbott also said he will work with lawmakers to ensure that new data centers be built with water-efficient technologies such as closed-loop cooling systems.