Texas Gov. Abbott seeks data center crackdown as state grapples with growing power demand

growing pains

Texas is poised to become the world’s largest data center market. Photo courtesy Google

Just seven months ago, Gov. Greg Abbott trumpeted Google’s $40 billion plan to add three data center campuses in Texas. Now, amid growing public outcry over such projects, Abbott is pushing for a regulatory crackdown on data centers in the Lone Star State.

Abbott recently sent a letter to leaders of the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) proposing stricter oversight of the state’s data centers. Texas is home to more than 400 data centers, with many more on the way, and is poised to become the world’s largest data center market.

Among other things, Abbott wants to:

Ensure residential electric bills go down — not up — as data centers connect to ERCOT’s grid, which supplies power for about 90 percent of Texans.
Require data centers to cover the costs of upgrades to deliver electricity to the power-hungry facilities.
Repeal sales tax exemptions and other “outdated or unnecessary” financial incentives for data centers.
Institute “best practices,” such as property setbacks and noise-reduction technology, to ease the impact of data centers on nearby residents.
Demand that all new data centers, which use a tremendous amount of water, be built with water-efficient technology.
Require large data centers to generate annual reports on their use of electricity and water.

Abbott has set a July 17 deadline for the PUC and ERCOT to address his recommendations.

“As Texas continues to welcome innovation and investment, we must ensure that growth strengthens our people and their quality of life without placing undue burdens on Texans and local communities,” Abbott wrote.

Abbott’s call for tighter control of data centers has elicited both praise and skepticism.

In a social media post on X, Texas House Speaker Dustin Burrows, a Lubbock Republican, thanked Abbott for seeking “accountability and reform” in the state’s data center industry. Burrows has made data centers one of his priority issues for the 2027 state legislative session.

State oil and gas regulator Wayne Christian, a member of the Texas Railroad Commission, weighed in with similarly positive comments about Abbott’s directive. He says an outright ban on data centers isn’t the answer to residents’ complaints about new facilities.

“The Texas way is not to answer innovation with government overreach or fear-driven bans,” Christian, whose agency wasn’t cited in Abbott’s letter, said in a statement posted on X. “Our job is to protect prosperity, safeguard taxpayers and ensure the infrastructure that powers our economy remains strong and reliable.”

Gina Hinojosa, an Austin Democrat who’s challenging Abbott in this November’s gubernatorial race, took issue with the governor’s edict on data centers.

“Greg Abbott is changing his tune on data centers because he knows his policies are unpopular,” Hinojosa, a state representative, wrote on X. “Nobody believes the arsonist is gonna be the one to put out the fire.”

Abbott’s call for stepped-up regulation of data centers echoes many of the concerns expressed by the state chapter of the Sierra Club, an environmental nonprofit.

“The growth of data centers reflects a broader transformation taking place across Texas,” the Sierra Club says on its website. “The state is becoming a hub for the technologies that will shape the future economy, from artificial intelligence to advanced computing and cloud services. At the same time, Texans deserve transparency about how these projects affect the communities where they are built.”

From Your Site Articles

Houstonians are concerned about data centers' high energy demands and the area’s power grid reliability, according to a new report. Photo courtesy UH

New survey reveals concerns over AI data center growth in Houston

data findings

A new report out of the University of Houston shows that area residents remain wary of the long-term effects of operating data centers.

The recent survey from the University of Houston’s latest SPACE City Panel, conducted by the Center for Public Policy at the Hobby School of Public Affairs, shows that while 85 percent of Houston-area residents use AI, nearly 63 percent oppose the construction of AI data centers within 1 mile of their homes.

Respondents’ concerns centered around data centers’ high energy demand and the area’s power grid reliability. According to the survey, 32 percent of residents who oppose local data center projects would be more likely to support the centers if they relied on renewable energy over fossil fuels.

“Respondents understand that AI can bring economic and educational benefits, but they are also concerned about the physical infrastructure needed to fuel AI, especially data centers,” Soran Mohtadi, post-doctoral fellow at the Hobby School and a researcher on the report, said in a news release. “This physical infrastructure demands more electricity and water, leading to environmental impacts.”

Experts estimate that 6.5 gigawatts of data center capacity will be added to the Texas grid by 2030. And Houston’s data center capacity is predicted to more than double by 2028.

The Electric Reliability Council of Texas also projects electricity demand could reach 218 gigawatts by 2031, which would be more than double the record peak set in August 2023. Data centers are expected to account for 86 gigawatts of that new demand.

Survey respondents also said they are concerned about the state's future water supply, given the large amounts of water that data centers need to stay cool.

In terms of who’s responsible for that issue, 57.6 percent of respondents said they put the onus on Texas lawmakers, while 31.5 percent say tech companies should be responsible.

Additionally, more than 75 percent of respondents believed that data center developers and technology companies—not residents—should bear the cost of infrastructure upgrades to support data centers.

“Every decision legislators make has implications on residents’ everyday lives and local infrastructure now and in the future,” Maria P. Perez Arguelles, lead researcher on the report and research assistant professor at the Hobby School, added in the news release. “This issue is going to become more important in years to come, so this is just the beginning.”

Read the full report here.

---

This article originally appeared on our sister site, EnergyCapitalHTX.com.

ERCOT predicts power demand will hit a peak of more than 92.2 gigawatts this summer. Photo via Unsplash

ERCOT braces for record-breaking power demand this summer

hot temps, high demand

The Electric Reliability Council of Texas, which manages about 90 percent of the state’s power, is waving a warning flag: The ERCOT grid may set a new record for peak demand this summer.

Based on expectations for a hotter summer this year than last year, ERCOT predicts power demand will hit a peak of more than 92.2 gigawatts this summer — enough power for roughly 18.4 million homes.

“Given the potential for extreme heat combined with significant load growth, ERCOT may surpass its current all-time summer peak,” the organization says in its 2026 summertime forecast.

Further taxing the ERCOT grid are power-hungry data centers and cryptocurrency-mining facilities.

Last year’s peak summer demand for ERCOT reached 83.7 megawatts on Aug. 18, and all-time peak demand of 85.5 gigawatts was recorded on Aug. 10, 2023.

Fortunately, ERCOT believes the grid is in good shape to withstand this summer’s heat: It found a 0.09 percent chance of a grid emergency in June and a 0.21 percent chance in July.

More generation of electricity from solar and wind is helping ERCOT meet stepped-up demand prompted by population growth, and the significant power needs of data centers and cryptocurrency-mining facilities.

About 27 million Texas customers depend on power from ERCOT’s grid.

Residents in Montgomery, Liberty and Hardin counties can expect to see power grid improvements in the coming years. Photo via Getty Images

Texas awards $73M for Houston-area grid resilience project

grid funding

Texas Gov. Gregg Abbott announced millions in funding for energy resilience projects around this state this week, with one major project set to impact the greater Houston area.

As part of the Texas Energy Fund's Outside of ERCOT Grant Program, the state announced a roughly $73 million agreement with the Sam Houston Electric Cooperative to replace and upgrade more than 9,000 electric poles and improve other equipment in Montgomery, Liberty and Hardin counties. The agreement is the first for the fund's Outside of ERCOT Grant Program, which supports state projects outside of the state's largest grid.

The multibillion-dollar Texas Energy Fund aims to "finance the construction, maintenance, and modernization of electric facilities across Texas." It was approved by voters in 2023. Other programs within the fund include the:

In-ERCOT Generation Loan Program
Completion Bonus Grant Program
Texas Backup Power Package Program

“The Texas Energy Fund delivers real results for Texans and strengthens the electric systems that families, businesses, and communities depend on,” Abbott said in a news release. “This grant to Sam Houston Electric Cooperative will replace thousands of vulnerable utility poles to better withstand severe weather and ensure a more reliable and resilient grid in East Texas.”

The Houston-area project, nicknamed Steel Anchor, is expected to be completed by June 2031. According to the release from the governor's office, the Sam Houston Electric Cooperative’s territory is one of the most hurricane-prone service areas in the state. The cooperative serves more than 38,000 Texas consumers

“Over the past decade, Sam Houston EC has strategically replaced poles to improve the strength of its electricity distribution system. This grant will boost the Cooperative’s ongoing grid-hardening and resiliency program,” Doug Turk, CEO of the Sam Houston Electric Cooperative, added in the release.

Following the announcement of the Sam Houston funding, Abbott's office also awarded another $200 million from the Outside of ERCOT Grant Program to upgrade approximately 700 miles of power equipment in Northeast Texas. The equipment is operated by Southwestern Electric Power Company, which serves more than 192,000 Texas consumers. The project will include improvements to 200 circuits, replacing aging copper wire with aluminum alloy conductors and replacing existing utility poles.

Additionally, the state announced its seventh Texas Energy Fund loan agreement for a 570 megawatt natural gas power plant in Sherman, Texas. The 20-year loan of up to $411 million is between the Public Utility Commission of Texas and Rayburn Electric Cooperative and is part of the fund's In-ERCOT Generation Loan Program. Rayburn will build the facility near its existing Rayburn Energy Station 1 in the Texoma region. It will connect to the ERCOT North Load Zone.

“When Texas voters overwhelmingly approved the Texas Energy Fund, they gave us a mandate to secure new, reliable power generation for Texas,” PUCT Chairman Thomas Gleeson added in a release. “The TxEF is delivering on that promise, and Rayburn Electric Cooperative’s new 570 MW power plant is proof. We are ensuring Texas families and businesses have power they can depend on for years to come.”

Solar generation is expected to reach 78 billion kilowatt-hours in 2026 in the ERCOT grid. Photo via Pexels

Texas solar set to overtake coal for first time in 2026, EIA forecasts

solar on the rise

Solar power promises to shine even brighter in Texas this year.

A new forecast from the U.S. Energy Information Administration (EIA) indicates that for the first time, annual power generation from utility-scale solar will surpass annual power generation from coal across the territory covered by the Electric Reliability Council of Texas (ERCOT).

Solar generation is expected to reach 78 billion kilowatt-hours in 2026 in the ERCOT grid, compared with 60 billion kilowatt-hours for coal, the EIA forecast says. The ERCOT grid supplies power to about 90 percent of Texas, including the Houston area.

“Utility-scale solar generation has been increasing steadily in ERCOT as solar capacity additions help meet rapid electricity demand growth,” the forecast says.

Although natural gas remains the dominant source of electricity generation in ERCOT, accounting for an average 44 percent of electricity generation from 2021 to 2025, solar’s share of the generation mix rose from four percent to 12 percent. During the same period, coal’s share dropped from 19 percent to 13 percent.

EIA predicts about 40 percent of U.S. solar capacity, or 14 billion kilowatt-hours, added in 2026 will come from Texas.

Although EIA expects annual solar generation to exceed annual coal generation in 2026, solar surpassed coal in ERCOT on a monthly basis for the first time in March 2025, when solar generation totaled 4.33 billion kilowatt-hours and coal’s totaled 4.16 billion kilowatt-hours. Solar generation continued to exceed that of coal until August of that year.

“In 2026, we estimate that solar exceeded coal for the first time in March, and we forecast generation from solar installations in ERCOT will continue to exceed that from coal until December, when coal generation exceeds solar,” says EIA. “We expect solar generation to exceed that of coal for every month in 2027 except January and December.”

For 2027, EIA forecasts annual solar generation of 99 billion kilowatt-hours in the ERCOT grid, compared with 66 billion kilowatt-hours of annual coal generation.

In April, ERCOT projected almost 368 billion kilowatt-hours of demand in ERCOT’s territory by 2032. ERCOT’s all-time peak demand hit 85.5 billion kilowatt-hours in August 2023.

“Texas is experiencing exceptional growth and development, which is reshaping how large load demand is identified, verified, and incorporated into long-term planning,” ERCOT President and CEO Pablo Vegas said. “As a result of a changing landscape, we believe this forecast to be higher than expected … load growth.”

TotalEnergies will supply power to Google data centers from two Texas solar farms under development. Photo via totalenergies.us

TotalEnergies to supply solar power to new Google data centers in Texas

power deal

French energy company TotalEnergies, whose U.S. headquarters are in Houston, has signed power purchase agreements to supply 1 gigawatt of solar power for Google data centers in Texas over a 15-year span.

The power will be generated by TotalEnergies’ two solar farms that are being developed in Texas. Construction on the company’s Wichita site (805 megawatt-peak, or MWp) and Mustang Creek site (195 MWp) is scheduled to start in the second quarter of this year.

Marc-Antoine Pignon, U.S. vice president for renewables at TotalEnergies, said in a press release that the 1-gigawatt deal “highlights TotalEnergies’ strategy to deliver tailored renewable energy solutions that support the decarbonization goals of digital players, particularly data centers.”

The deal comes after California-based Clearway, in which TotalEnergies holds a 50 percent stake, secured an agreement to supply 1.2 gigawatts of solar power to Google data centers in Texas and other states.

“Supporting a strong, stable, affordable grid is a top priority as we expand our infrastructure,” said Will Conkling, director of clean energy and power at Google. “Our agreement with TotalEnergies adds necessary new generation to the local system, boosting the amount of affordable and reliable power supply available to serve the entire region.”

TotalEnergies maintains a 10-gigawatt-capacity portfolio of onshore solar, wind and battery storage assets in the U.S., including 5 gigawatts in the territory served by the Electric Reliability Council of Texas (ERCOT).

Other clean energy customers of TotalEnergies include Airbus, Air Liquide, Amazon, LyondellBasell, Merck and Microsoft.

Ad Placement 300x100

Ad Placement 300x600

CultureMap Emails are Awesome

Property Showcase

10+ must-attend Houston energy events happening in Q3 2026

Must-attend meetings

Editor's note: Q3 is here, and with it, a full slate of must-attend events for Houston energy professionals. On the agenda are exciting exhibitions, expos, week-long happenings, and more. Mark your calendars for these top Houston energy transition events taking place July to September 2026, and begin registering today. Please note: this article may be updated to include additional events.

July 15-16: Downstream USA Conference & Exhibition

Now in its 14th year, Reuters Events: Downstream USA 2026 brings together 3,000+ decision‑makers from refining, chemicals, petrochemicals, EPCs, technology providers, and more. Join the industry’s largest and most influential downstream gathering, which features more than 160 exhibition spaces to connect owner-operators and solution providers through interactive, peer-led session formats and onstage discussions.

This event begins July 15 at George R. Brown Convention Center. Register here.

July 24: Chevron Innovation Competition

The University of Houston presents the 5th Annual Chevron Innovation Commercialization Competition, a dynamic event that empowers students to transform cutting-edge energy research into real-world solutions. This event is sponsored by Chevron and coordinated by UH Energy.

The elimination round takes place July 24 at 2 pm. Find details here.

August 17-20: IMAGE '26

Co-hosted by SEG and AAPG, the International Meeting for Applied Geoscience and Energy event (IMAGE '26) is the world’s premier gathering for geoscientists, energy professionals, and industry leaders to connect and innovate. A global audience from all sectors of geosciences and energy come together in Houston to collaborate and network through a comprehensive technical program with more than 1,100 presentations, engaging panel discussions, hands-on workshops and courses, and a unique exhibition experience.

This event begins August 17 at George R. Brown Convention Center. Register here.

August 18-19: AVEVA Day Energy & EPC

AVEVA Day Energy & EPC brings together 400+ leaders and experts from the oil & gas, energy, chemicals, and EPC industries. Attendees will connect with peers facing similar challenges, learn from real customer stories, and discover how companies are accelerating operations with AI and industrial intelligence.

This event begins August 18 at Westin Houston Memorial City. Register here.

August 26-27: Texas Energy Forum 2026

Organized by U.S. Energy Stream, the 2026 conference will focuses on the theme, "AI Runs on Texas Energy: How Texas and Alberta Are Powering the AI Revolution." The forum brings together U.S. Senators, members of Congress, senior government officials, and leaders from the energy, technology, manufacturing, and financial sectors for candid discussions on the energy, infrastructure, and technological advancements required to power the AI revolution and strengthen American competitiveness.

This event begins August 26 at the Petroleum Club of Houston. Register here.

September 13-18: Houston Energy & Climate Week

Houston Energy & Climate Week is a six-day gathering that welcomes an unparalleled selection of global energy leaders and communities to the energy capital of the world for a full slate of events, from tech tours and networking to a climatetech summit and digital symposium.

This event kicks off September 13 and continues for six days. Find details here.

September 14-18 Houston Energy + Climate Startup Week

Launched in 2024, the official Houston Energy and Climate Startup Week returns for its third year, showcasing how Houston is developing and scaling real solutions by meeting growing global energy demand while reducing carbon emissions. Join leading energy and climate venture capital investors, industry leaders, and startups from around the world for this showcase of the most innovative companies and technologies that are transforming the energy industry while driving a sustainable, low-carbon energy future.

This event kicks off September 14 and continues all week. Find details here.

September 20-23: 2026 Geothermal Rising Conference

Geothermal Rising Conference is the industry’s flagship annual conference, reflecting the global nature of the geothermal industry while highlighting the width and breadth of the community. The conference offers technical, policy, and market sessions, educational seminars, tours of geothermal and renewable energy projects, and numerous networking opportunities. An additional expo showcases projects, services, and state-of-the-art technology and equipment for the geothermal community.

This event begins September 20 at Marriott Marquis Houston. Register here.

September 22-23: 2026 API Offshore Safe Lifting Conference & Expo

The 2026 API Offshore Safe Lifting Conference & Expo is your opportunity to see the latest offshore developments while sharing experiences, practices, and even information on real-life incidents. The 2026 program features two full days of technical sessions, regulatory insights, and networking focused on advancing offshore lifting safety, with keynotes, emerging technologies, and multiple networking opportunities.

This event begins September 22 at the Royal Sonesta Houston Galleria. Register here.

September 22-24: Intelligent Asset Management in Energy Summit

The Intelligent Asset Management in Energy Summit is the premier North American event dedicated to helping energy leaders unlock the full potential of their assets through advanced analytics, predictive maintenance, and integrated digital strategies. The 2026 summit will cover how innovative asset management solutions can reduce downtime, optimize performance, and deliver measurable ROI in a rapidly evolving energy landscape.

This event begins September 22 at Norris Conference Center. Register here.

Houston startup secures $5M to turn oilfield wastewater into critical minerals

fresh funding

Houston-based startup Altillion has secured $5 million in seed funding to accelerate the commercialization of its proprietary IRIS and ALIX technologies, which convert oilfield-produced water into valuable minerals.

San Francisco-based EIC Rose Rock and Houston-based Flathead Forge led the round. Altillion says the funding will go toward pilot facilities and commercial deployments as the company looks to scale in the U.S.

“Altillion’s efficient and scalable technologies are needed more than ever to reshape critical mineral recovery and facilitate beneficial use of oilfield brines,” Jay Keener, Altillion’s CEO and co-founder, said in a news release. “We’re uniquely positioned to provide a stable, domestic supply of the critical minerals needed for electronics, batteries, healthcare and national defense technologies. This investment from EIC Rose Rock and Flathead Forge enables us to strategically accelerate this impact and is very timely given the current geopolitical dynamics.”

Altillion's IRIS and ALIX platforms extract minerals like iodine, lithium and copper from oilfield-produced water, geothermal brines and salars. This process allows companies to unlock new sources of revenue while also boosting the domestic critical minerals supply chain. The company announced earlier this summer that it will launch a feasibility project in the Permian Basin and aims to develop a path to commercial-scale implementation in the field.

“We are excited to partner with Altillion to scale and deploy these world-class technologies to access the vast wealth hidden in wastewater,” David Clouse, Managing Director of EIC Rose Rock, added in the release. “With Altillion, we’re expanding our ability to empower the energy industry to domestically source the critical minerals America needs for a robust economy and supply chain.”

Altillion was founded by Keener and COO Scott Buckwald in 2023. Keener previously founded KDH Trading, where Buckwald also serves as COO, according to his LinkedIn page.

Houston's KBR to provide tech for Singapore SAF plant

SAF agreement

Houston engineering and technology contractor KBR has been picked as the technology provider for what’s expected to be Asia's first commercial-scale ethanol-to-jet sustainable aviation fuel (SAF) plant.

The proposed plant on Jurong Island in Singapore is being developed by Keppel Ltd.’s Infrastructure Division and Aster Chemicals and Energy. KBR will provide technology licensing and Front-End Engineering Design (FEED) services based on its PureSAF technology.

The plant has a planned production capacity of up to 100,000 tons of SAF per year. The plant is subject to final investment decisions and regulatory approvals.

“We are looking forward to working with Keppel and Aster on this key project and to support Singapore’s ambition of becoming Asia’s leading SAF hub and advancing the ongoing efforts to decarbonize the country’s aviation ecosystem,” Stuart Bradie, KBR president and CEO, said in a news release.

According to KBR, its PureSAF Technology can process multiple feedstocks like bioethanol, syngas, carbon dioxide and hydrogen and convert them to SAF, diesel and gasoline.

The technology was developed by Swedish Biofuels AB and commercialized by KBR.

“KBR’s PureSAF is a feedstock-flexible, bankable technology that is designed to deliver a 100% drop in jet fuel, ready to power aircraft without blending,” Bradie added in the news release. “We are constantly innovating our SAF solution to make it compatible with feedstock availability in different regions and to enable the aviation industry to transition to low-carbon jet fuel with a cost-optimized approach.

KBR has also entered into a memorandum of intent with Keppel’s Infrastructure Division, which states that the companies will collaborate again on decarbonization efforts across biofuels, plastic recycling, digitalization via AI, and SAF.

KBR announced in October that it would spin off its Mission Technology Solutions business, nicknamed SpinCo. The scaled-down KBR, nicknamed RemainCo, would concentrate solely on sustainability technology and services designed to reduce carbon emissions and support energy transition efforts. SpinCo named its new CEO and CFO earlier this month.

View All Listings

ENERGYCAPITALHTX EMAILS ARE AWESOME