Texas’s AI infrastructure problem is no longer simply finding enough electricity. The state first has to determine which of the extraordinary amounts being requested actually represent projects capable of being built.
Gov. Greg Abbott ordered Texas grid operator ERCOT and the Public Utility Commission of Texas to audit data centers seeking connections before allowing them to advance through the interconnection process.
As of August 3, ERCOT was considering more than 474 GW of large-load requests, approximately 90% of which came from data centers, according to the governor’s office. That theoretical queue is more than five times Texas’s record electricity demand with ERCOT’s all-time peak reaching 91.13 GW on July 22.
Sponsored · McLaren Resources Inc.
A recent Reuters review found more than 700 GW of large-load electricity requests across portions of the Midwest, Mid-Atlantic, and South, with most tied to data centers. Texas requests alone had risen from roughly 48 GW in 2023 to more than 474 GW.
The figures are not forecasts that every project will be built. Utilities count prospective customers differently, and requests can include projects that lack firm financing, duplicate proposals seeking capacity from multiple providers, or developments that have not reached contractual commitments.
Money starts shrinking the queue
Evidence from other markets shows how dramatically proposed demand can change once developers have to put capital behind their requests.
For instance, American Electric Power’s AEP Ohio, owned by American Electric Power, had received more than 30 GW of proposed data-center demand before Ohio approved a special data-center tariff.
Sponsored · Canadian Copper Inc.
When developers were required to pay for formal engineering studies, only 13.02 GW proceeded. And after AEP Ohio required service agreements, collateral, and other financial commitments, just 5.64 GW of that group signed binding contracts.
AEP Ohio said the process was designed specifically to avoid building an oversized system around inaccurate demand estimates and passing the resulting costs to other customers.
Exelon has seen a similar reset. Its estimate of “high probability” data-center demand fell nearly 40% from 18 GW at the end of 2025 to approximately 11 GW after its utilities began requiring transmission security agreements and collateral. About 4 GW of that demand is backed by agreements carrying roughly $1.00 billion in collateral, according to an Exelon filing.
The company said its $41 billion capital program through 2029 was unchanged because speculative projects had not been incorporated into the plan.
Texas moves the verification test up front
ERCOT had already created a new “Batch Zero” system to study large users of at least 75 MW collectively rather than project by project. In June, ERCOT said it was tracking more than 438 GW of large-load requests, with almost 89% coming from data centers.
Abbott’s August order moved verification ahead of that process. ERCOT subsequently delayed Batch Zero classifications while the audit is conducted.
Projects must now provide additional information including ownership and controlling interests, electricity requirements, on-site generation plans, public incentives, water consumption, cooling technology, and community impacts.
The cost issue had already reached the governor’s office before the pause. In June, Abbott directed the PUCT to require data centers to fully fund electric infrastructure needed to serve their operations and said regulators should prevent development risks and costs from being shifted onto Texans. He also pledged to pursue legislation requiring data centers to contribute electricity capacity rather than only adding demand.
Monitoring Analytics, the independent market monitor for PJM, calculated that existing and forecast data-center demand increased capacity-market costs by $29.40 billion across PJM’s last four capacity auctions, according to Reuters.
Texas’s audit therefore addresses a different constraint in the AI infrastructure race. Even before utilities determine how to supply hundreds of gigawatts of prospective demand, regulators are demanding stronger evidence that the customers asking for that electricity will actually show up.
