Operators of Texas’ power grid have taken steps to regulate data center expansion and are now calling on state lawmakers to expand their authority further.
The Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) made their progress in preparing for an influx of data centers in Texas known this month, in their response to a letter from Governor Greg Abbott.
The governor’s letter, sent out in June, requested the PUCT begin taking action to ensure that data centers lower residents’ energy bills once the facilities are connected to the grid, along with demanding that data centers pay for the costs of their electric infrastructure.
The governor also directed the commission, along with ERCOT, to review their authority and “identify actions that can be taken under those authorities to safeguard Texans, their property and resources.”
In their response to the governor’s letter, penned by PUCT Chairman Thomas Gleeson, both agencies outlined policies already underway, which were undertaken in response to state law passed in the 2025 legislative session.
Gleeson claimed that the PUCT and ERCOT had already adopted new requirements for data centers looking to join the grid, and noted steps the agencies had taken to ensure existing power plants continue to provide energy to average Texans, even as those facilities begin powering new data centers.
According to Gleeson, the two agencies have also assessed how transmission costs are distributed among consumers and improved their process for forecasting the amount of energy needed to power the grid.
In addition, steps have been taken to ensure that data centers, along with other large energy consumers, pay for the costs of building the new infrastructure they require to connect to the grid.
Gleeson adds that the agencies are even developing a new program that will encourage data centers to cut back on their energy consumption ahead of “an anticipated electric energy emergency.”
“Texas should welcome responsible economic development, but it must do so in a manner that prioritizes affordability, reliability and the interests of the residents who depend on the grid,” wrote Gleeson.
Gleeson’s letter also discussed potential state legislation he believed would help the two agencies better regulate data centers. In particular, he noted that state regulators should be able to communicate directly with data centers, instead of communicating with the data center’s utility companies.
He adds that Texas lawmakers should require data centers to register with the state and to comply with an already existing law that “prohibits agreements that would give certain foreignlinked companies direct or remote access to, or control over, Texas’ critical infrastructure.”
This law, known as the Lone Star Infrastructure Protection Act, currently only applies to power plants and transmission companies; however, expanding the laws application would give Texas more regulatory power over data centers.