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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  • Repeal sales tax exemptions and other “outdated or unnecessary” financial incentives for data centers.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.”

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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.

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

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.”

U.S. Secretary of the Interior Doug Burgum and U.S. Secretary of Energy Chris Wright will return to CERAWeek this month, along with dozens of energy executives and innovators. Photos courtesy CERAWeek.

CERAWeek 2026 to bring energy leaders to Houston to discuss tech and geopolitics

where to be

CERAWeek returns this month, March 23-27, and will once again bring leading energy executives and government officials to Houston.

The 44th annual event will again host U.S. Secretary of Energy Chris Wright and U.S. Secretary of the Interior Doug Burgum.

Wright will participate in a plenary session focused on energy policy with Daniel Yergin, conference chair and vice chairman of S&P Global, on March 23. The following day, he will be featured in the Celebrating 10 Years of U.S. LNG reception with Jack Fusso, president and CEO, of Cheniere Energy. Both events are part of the Executive Conference track.

Burgum will participate in a leadership dialogue plenary session with Yergin on March 25. It is also part of the Executive Conference track. Burgum is also chairman of the National Energy Dominance Council, established by President Trump in 2025.

Top energy executives, many of whom are based in Houston, will also be featured prominently at the week-long event. Other speakers include:

  • Bill Blevins, director of grid coordination for the Electric Reliability Council of Texas (ERCOT)
  • Trevor Best, CEO of Syzygy Plasmonics
  • Marie Contour Carrere, executive director of the Rice Sustainability Institute
  • Ryan DuChanois, co-founder and CEO of Solidec
  • Reginald DesRoches, president of Rice University
  • Georgina Campbell Flatter, CEO of Greentown Labs
  • Jim Fitterling, chair and CEO of Dow Inc.
  • Vicki Hollub, CEO of Occidental Petroleum Corp.
  • Renu Katon, chancellor and president of the University of Houston
  • Ryan Lance, chairman and CEO of ConocoPhillips
  • Olivier Le Peuch, CEO of SLB
  • Patrick Pouyanné, chairman and CEO of TotalEnergies SE
  • Adrian Tromel, chief innovation officer and interim VP for Innovation at Rice University
  • Bobby Tudor, founder and CEO of Artemis Energy Partners and chairman of HETI
  • Wael Sawan, CEO of Shell plc
  • Lorenzo Simonelli, chairman and CEO of Baker Hughes Co.
  • Mike Wirth, chairman and CEO of Chevron Corp.
  • Jeremy Pitts, managing director of Activate Houston
  • And many others

This year, CERAWeek will center around the theme of Convergence and Competition: Energy, Technology and Geopolitics.

"Change is inescapable," Yergin said in a news release. "The global energy landscape—and to a large extent the entire global economy—is being fundamentally reshaped by the dual forces of convergence and competition. The race for AI is fusing the energy and technology industries like never before, bringing into sharp relief the need to align energy expansion with sustainable economic growth."

"Yet, the potential for collaboration and innovation is increasingly matched by the risk for collision and conflict in a world marked by geopolitical rivalry, tariffs and fragmented supply chains," he continued. "Reconciling an increasingly complex world with the growing demand for energy that is stable, secure and affordable is a complex reality that CERAWeek 2026 will tackle when global energy leaders meet in Houston."

Key topics of discussion will include:

  • Politics, Economics, Trade and Supply Chains
  • Policy, Regulations and Stakeholders
  • Oil Value Chain
  • Power, Renewables, Generation and Grid
  • AI and Digital
  • Minerals and Mining
  • Electrification Technologies
  • Investment and Financing
  • Chemicals and Materials
  • Business Strategies
  • The Innovation Ecosystem
  • Managing Emissions
  • Low-Carbon Fuels and Mobility
  • Climate and Sustainability
  • Workforce Strategy

The CERAWeek Innovation Agora track, which is the program's deeper dive into technology and innovation, will feature thought leadership on "AI, decarbonization, low carbon fuels, cybersecurity, hydrogen, nuclear, mining and minerals, mobility, automation and more," according to the release.

Agora Hubs will return this year and be divided into three zones: new energies, carbon and climate, and AI. The hubs will feature amphitheater-style sessions and panels. Agora Pods will allow energy startups to showcase their ideas in 20- to 30-minute presentations.

Additionally, CERAWeek will introduce a new program this year on Friday, March 27. Known as Look Forward, it will focus on economics, politics and technology.

See the full agenda for the week here. Find more information and register for the event here.

This are heating up for Fervo. Photo via Fervo Energy

Fervo taps new geothermal site and more energy transition news to know

Trending Topics

Editor's note: We're looking back at the biggest energy transition headlines from the second half of February, including Fervo's hottest well to date and the future of data centers in Texas. Below are the five most-read EnergyCapital stories from February 16-28, 2026.

1. Fervo taps into its hottest-ever geothermal reservoir

Fervo Energy has unlocked multigigawatt potential from a new geothermal energy site. Photo courtesy Fervo Energy.

Things are heating up at Houston-based geothermal power company Fervo Energy. Fervo recently drilled its hottest well so far at a new geothermal site in western Utah. Fewer than 11 days of drilling more than 11,000 feet deep at Project Blanford showed temperatures above 555 degrees Fahrenheit, which exceeds requirements for commercial viability. Fervo used proprietary AI-driven analytics for the test. Continue reading.

2. Texas could topple Virginia as biggest data-center market by 2030, JLL report says

A new report shows the role Texas could play as the data-center sector enters "hyperdrive." Photo via JLL.com.

Everything’s bigger in Texas, they say—and that phrase now applies to the state’s growing data-center presence. A new report from commercial real estate services provider JLL says Texas could overtake Northern Virginia as the world’s largest data-center market by 2030. Northern Virginia is a longtime holder of that title. Continue reading.

3. Texas claims No. 1 spot on new energy resilience report

Texas outpaced the rest of the country in a new energy resilience report, despite grid challenges and rising AI demand. Photo courtesy of ERCOT

A new report by mineral group Texas Royalty Brokers ranks Texas as the No. 1 most energy-resilient state. The study focused on four main sources of electricity in hydroelectric dams, natural gas plants, nuclear reactors and petroleum facilities. Each state was given an Energy Resilience Score based on size and diversity of its power infrastructure, energy production and affordability for residents. Continue reading.

4. Texas' oil and gas foundation could boost its geothermal future, UH says

A new UH white paper says that Texas is poised to lead advanced geothermal due to its oil and gas skills and capacity. Photo via UH.edu.

Equipped with the proper policies and investments, Texas could capitalize on its oil and gas infrastructure and expertise to lead the U.S. in development of advanced geothermal power, a new University of Houston white paper says. Continue reading.

5. HETI leader reflects on four years focused on the energy transition

Jane Stricker reflects on four years at HETI. Courtesy photo

It’s hard to believe only four years have passed since I joined the Greater Houston Partnership to lead the Houston Energy Transition Initiative. We talk about COVID years feeling simultaneously like just yesterday and a lifetime ago, and my time at HETI feels quite similar. The energy and climate landscape has evolved dramatically over the last few years, but one constant has endured…Houston remains at the heart of the energy industry. Continue reading.

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Baker Hughes closes $13B acquisition of gas equipment maker Chart Industries

m&a activity

Houston-based energy technology company Baker Hughes has completed its $13.6 billion acquisition of Chart Industries, a provider of equipment and services for liquefying gases like LNG, hydrogen, nitrogen and oxygen.

Baker Hughes says the deal advances its “strategic vision” to be a leader in energy and industrial technology.

Jim Apostolides, who had previously served as chief infrastructure and performance officer at Baker Hughes, leads the Chart business in his new role as senior vice president. Chart President and CEO Jill Evanko left the company in January to become CEO of Duravant, which makes equipment for food processing, packaging and materials handling.

Publicly traded Chart reported $4.3 billion in revenue for fiscal year 2025. Its customers operate in sectors such as gas infrastructure, nuclear, data centers, carbon capture and storage, space, and geothermal energy.

“Chart’s thermal management solutions bring complementary capabilities and aftermarket service offerings that accelerate our portfolio strategy,” Lorenzo Simonelli, chairman and CEO of Baker Hughes, said in a news release. “Together, we will expand the solutions we deliver across a broader range of energy and industrial markets and create greater value for customers and shareholders.”

Chart will operate as a new financial reporting segment within Baker Hughes, reflecting what Baker Hughes says is the “scale and strategic importance of its differentiated capabilities in air and gas handling, thermal management, and lifecycle services.”

Baker Hughes announced the Chart deal last July.

“We know Chart well, having worked alongside them on many critical energy infrastructure projects,” Signorelli said last year. “Their products and services are highly complementary to our offerings and strongly aligned with our intent to deliver distinctive and efficient end-to-end lifecycle solutions for our customers across their most critical applications.”

Chart’s website lists offices in Houston, The Woodlands, and Austin, with corporate headquarters in Ball Ground, Georgia. It’s unclear what will happen to those offices.

KBR appoints C-suite duo to lead forthcoming spinoff

Making Moves

In advance of the spinoff of its Mission Technology Solutions unit, Houston-based KBR has made two C-suite hires for the new business.

Michael LaRouche is coming aboard as president and CEO of the spinoff, currently called SpinCo, on Sept. 26. Nicholas Veasey joined as executive vice president and chief financial officer earlier this month, on July 1.

“Michael and Nick bring a highly complementary combination of operational leadership, financial expertise, and mission-driven experience, and together they will accelerate our impact for stakeholders,” Stuart Bradie, chairman, president and CEO of publicly traded KBR, said in a news release.

LaRouche currently is CEO of Serco North America, a Herndon, Virginia-based government services contractor. Veasey most recently was CFO of MAG Aerospace, a Fairfax, Virginia-based defense contractor.

SpinCo, a government services contractor, will launch with more than $5.3 billion in annual revenue and 20,000 employees. KBR’s total headcount is around 36,000. Branding for SpinCo, including a formal name, will be revealed in July.

“SpinCo is positioned as a top-tier provider of differentiated technology solutions, anchored by deep mission expertise, global scale, and a relentless commitment to delivering for our customers,” LaRouche says.

After the spinoff, the slimmed-down KBR will focus on its Sustainable Technology Solutions business, a provider of energy and industrial technology that generated $2.5 billion in revenue in 2025 and is designed to reduce carbon emissions and support energy transition efforts. Bradie will remain chairman, president and CEO of the business.

Both SpinCo and the new KBR will be public companies. The spinoff is scheduled to be completed in January 2027.

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This article first appeared on InnovationMap.com.

Houston PE firm makes latest nuclear industry acquisition

nuclear deal

Houston-based private equity firm Pelican Energy Partners has acquired California-based Veridiam for an undisclosed amount in an effort to further increase the firm’s focus on the nuclear energy sector.

Veridiam is a strategic manufacturer that specializes in the precision fabrication of components and assemblies made from exotic metals or advanced alloys for the nuclear, aerospace, defense, space and medical fields.

Following the acquisition, Veridiam will continue to operate under its existing name and will led by its current management team, including CEO Brian Joyal.

“Joining the Pelican platform accelerates our strategic trajectory," Joyal said in a news release. "With Pelican's support, we will accelerate the modernization and expansion of our manufacturing capabilities to meet unprecedented demand across the nuclear, aerospace, defense, and medical sectors. This partnership also enables us to expand our portfolio of mission-critical products and engineered solutions while maintaining the uncompromising quality, precision, and reliability standards that have defined Veridiam for more than 60 years."

Since 2011, Pelican has raised over $1 billion in committed capital and has realized over 15 investments. Currently, Pelican is investing from its fourth fund, which aims to support and advance companies that provide critical services and products to the nuclear power industry.

In 2024, Pelican raised a $450 million fund to invest in nuclear energy services and equipment companies.

The Veridiam deal comes after Pelican has completed several nuclear acquisitions. The PE firm acquired New Hampshire-based Environmental Alternatives Inc., which provides nuclear decontamination services, in April; it acquired Georgia-based WSI Welding Solution in December, which services the nuclear sector.

"Veridiam sits at the center of our investment thesis and reflects the kind of deal Pelican does best," Mike Scott, managing partner and founder of Pelican Energy Partners, added in the news release. "With the right capital and operating support, we see a clear opportunity to strengthen the business, invest in its capabilities, and create long-term value for customers and shareholders."

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