Texas audits 474 GW data centre queue as US tackles speculative power demand

Summary

• Texas grid review: Governor Greg Abbott has ordered an audit of data centre projects seeking to connect to the ERCOT grid, where requests exceed 474 gigawatts.
• Growing speculative demand: Large-load requests in Texas and other parts of the United States have surpassed 700 gigawatts, raising concerns that some projects may never be built.
• Pressure on power costs: PJM’s independent market monitor estimates that existing and forecast data centre load growth added $29.4 billion to capacity-market revenues across the grid operator’s last four auctions.

AUSTIN, September 1, 2026 — Texas is reviewing a surge of data centre power requests after Governor Greg Abbott ordered state regulators and the Electric Reliability Council of Texas to audit projects moving through the grid interconnection process.

The review comes as requests to connect large data centres and other major electricity users to the ERCOT grid have risen above 474 gigawatts, more than five times the system’s record peak electricity demand.

Abbott directed the Public Utility Commission of Texas and ERCOT to verify projects before they move forward through the interconnection process. Projects that fail to meet the requirements established by regulators and state law can be denied a connection to the Texas grid.

The move reflects a wider challenge facing electricity systems across the United States as artificial intelligence, cloud computing and other large industrial projects generate unprecedented requests for power.

Texas seeks to separate viable projects from speculative demand

Not every request in an electricity queue becomes an operational facility.

Developers may seek access to grid capacity years before construction begins, while projects can change ownership, lose financing or fail to secure customers.

This creates a planning challenge for utilities and grid operators, which must estimate how much generation and transmission infrastructure will be needed to meet future demand.

Reuters reported that Texas has become the first major data centre hub to halt projects from advancing through its connection process while regulators review the scale and credibility of proposed demand.

Under the Texas audit, regulators are seeking clearer information about proposed projects and the companies behind them to improve the accuracy of long-term electricity planning.

The central concern is that inflated demand projections could lead to unnecessary infrastructure investment or make it more difficult for grid operators to plan reliably for projects that are genuinely ready to proceed.

Large-load requests exceed 700 GW across the US

The issue extends beyond Texas.

Reuters reported that more than 474 GW of large-load requests have accumulated in Texas, alongside about 270 GW of additional requests in other parts of the country.

Together, the requests exceed 700 GW, although the projects are at different stages of development and many may not ultimately be constructed.

The rapid increase is being driven largely by proposed data centres, particularly facilities designed to support AI and cloud computing.

As developers compete for access to electricity and suitable sites, utilities are increasingly introducing financial and technical requirements to distinguish committed projects from speculative proposals.

Financial requirements reshape development queues

Utilities in several regions have introduced upfront costs, collateral requirements and long-term contractual obligations for large data centre projects.

AEP Ohio, for example, requires large data centre applicants to complete a formal application process and pay load-study fees ranging from $10,000 to $100,000, depending on the amount of electricity requested.

The utility also requires qualifying customers to provide financial commitments or collateral under its data centre tariff.

AEP Ohio said its revised process had helped filter out more speculative or uncertain projects, allowing the company to obtain more reliable estimates of future electricity demand.

The approach reflects a broader shift among utilities toward requiring developers to demonstrate greater financial and commercial commitment before major grid investments are planned around proposed facilities.

Data centre growth adds pressure to PJM’s capacity market

The consequences of rapidly growing data centre demand are also visible in the PJM Interconnection region, which serves parts of the Mid-Atlantic and Midwest.

Monitoring Analytics, PJM’s independent market monitor, estimated that existing and forecast data centre load growth resulted in a combined $29.4 billion increase in capacity-market revenues across PJM’s last four capacity auctions.

The figure represented about 46% of the $63.6 billion in total capacity charges across those four auctions, according to the market monitor.

In PJM’s most recent auction, the market monitor estimated that data centre demand accounted for about $6.3 billion of the $16.4 billion in total capacity charges.

Capacity costs are only one component of the broader electricity system, and the extent to which higher wholesale costs affect individual customers varies by state, utility and electricity supply arrangements.

Still, the figures have intensified debate over whether large new data centres should bear a greater share of the infrastructure and capacity costs associated with their rapidly growing electricity needs.

Utilities rethink how they plan for AI demand

The rise of AI infrastructure is forcing electricity providers to reconsider traditional approaches to forecasting demand.

Data centres can require hundreds of megawatts of electricity, while some proposed campuses are designed to consume gigawatt-scale amounts of power.

The scale and uncertainty of proposed projects make it difficult for utilities to determine how much new generation, transmission and distribution infrastructure should be built.

If demand forecasts prove too high, utilities could invest in infrastructure that is not fully used. If they underestimate demand, the result could be connection delays and pressure on grid reliability.

Texas and other jurisdictions are therefore moving toward stricter verification, financial commitments and more detailed project disclosures.

Why this matters

• Grid planning: More accurate demand forecasts can help utilities plan generation and transmission investments more effectively.
• Speculative projects: Financial and technical requirements may reduce the number of projects holding positions in electricity queues without firm commitments.
• AI infrastructure: Rapid data centre expansion is becoming one of the most significant new sources of electricity demand in the United States.
• Power market costs: PJM’s market monitor has linked existing and forecast data centre load growth to a substantial increase in capacity-market revenues.
• Developer accountability: Utilities are increasingly requiring large electricity users to demonstrate financial viability before major infrastructure investments are made.

FAQs

Q1: Why is Texas auditing data centre power requests?

Governor Greg Abbott ordered the PUCT and ERCOT to conduct a comprehensive verification and audit of data centre projects advancing through ERCOT’s interconnection process. The review is intended to improve the accuracy of demand forecasts and ensure projects meet regulatory requirements.

Q2: How much power has been requested from the ERCOT grid?

ERCOT is considering more than 474 GW of requests to connect to the Texas grid, according to the Texas governor’s office. Not all of these requests are expected to become operational facilities.

Q3: What is speculative or “ghost” power demand?

The term refers to electricity requests associated with projects that may lack sufficient financing, customers or other commitments needed to ensure they will ultimately be built.

Q4: How are utilities filtering speculative projects?

Utilities are increasingly using application fees, load studies, collateral requirements and long-term contractual commitments to assess whether proposed projects are financially viable.

Q5: How has data centre demand affected PJM’s capacity market?

PJM’s independent market monitor estimates that existing and forecast data centre load growth added $29.4 billion to capacity-market revenues across the grid operator’s last four capacity auctions.