Abbott directs regulators to shift data center power costs

Texas Governor Greg Abbott has directed state utility regulators to take immediate action to shield residential electricity customers from the costs of expanding data center infrastructure, while also outlining a comprehensive legislative agenda for 2027 aimed at regulating the industry's rapid growth. The directives, issued in a letter on Wednesday, June 10, 2026, to the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT), come as the state grapples with soaring power demands driven by artificial intelligence development.

Governor Abbott instructed the PUC to initiate action by July 31 to reduce residential transmission costs linked to data centers. He also directed both agencies to require data centers to pay for all electric infrastructure costs associated with their operations, ensuring those costs are not passed to residential ratepayers. The PUC and ERCOT must submit a joint memorandum by July 17 detailing the actions they have taken, any limits they face, and offering legislative recommendations.

In his letter, Abbott stated that connecting data centers to the grid should result in lower bills for Texans. He emphasized that the...