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Texas Regulators Move to Keep Data Center Growth From Raising Home Electric Bills

State utility regulators and the ERCOT grid operator have outlined steps to make data centers pay for the infrastructure they require, part of an effort officials say is aimed at keeping residential electric bills affordable.

Hugo Baptiste

July 25, 20261 min read

Energy grid - illustration, Jake Team LLC
Energy grid - illustration, Jake Team LLC

SHERMAN, Texas — Texas utility regulators and the state's main grid operator have laid out a set of actions intended to shield households from the cost of rapid data center growth, the governor's office said this week.

Governor Greg Abbott released a response from the Public Utility Commission of Texas and the Electric Reliability Council of Texas to a directive he issued June 10. That directive asked the agencies to require data centers to pay for the electric infrastructure they need, to ensure new connections do not raise residential bills, and to develop additional protections for ratepayers.

"Residential ratepayers will not foot the bill for this industry's growth," Abbott said in the announcement. "These actions keep electric bills affordable and protect the water our communities need."

According to the state, the measures include requiring data centers to pay for transmission lines built to serve them and to contribute toward lowering residential bills, new rules meant to keep large facilities from diverting power from the grid, a screening process for grid interconnections, and a mandate that new data centers reduce their power use quickly when ERCOT directs. The agencies also recommended legislative changes for the upcoming session, including registration requirements and expanded grid-security authority.

Sherman, the Grayson County seat in North Texas, sits within the ERCOT grid region the directive addresses.

State officials said the commission and ERCOT would continue work on stronger standards data centers must meet before connecting to the grid, and that the governor plans to work with the Legislature to write the protections into law.

Sources: Office of the Texas Governor (July 24, 2026): https://gov.texas.gov/news/post/governor-abbott-announces-puc-and-ercot-actions-protecting-residential-ratepayers-from-data-center-costs

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Hugo Baptiste

Hugo Baptiste covers downtown development, real estate, and growth in Sherman.

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