Texas just froze new data center connections. Governor Greg Abbott ordered the Public Utility Commission and ERCOT to audit every single project waiting in the grid queue, effectively slamming the door on competitors while established operators like Iris Energy and Riot Platforms keep their lights on without interruption.
The move targets a queue that spiraled completely out of hand. Texas is fielding 474 GW of interconnection requests. That's over a third of America's entire installed generating capacity stacked into one state. About 90% of those requests come from data center and crypto mining operations chasing cheap power and friendly regulations.
Abbott's August 3 directive tells regulators to verify power demand, water usage, ownership structures, and regulatory compliance for each applicant. Projects that don't pass the test lose grid access entirely. A June order already forced data centers to fund their own interconnection infrastructure and explore on-site power generation, but this audit is the real chokehold.
The waiting game just got longer
National median wait time for a 1 GW interconnection already sits around 50 months. Add a full state audit to that timeline and new competitors are looking at half a decade before they can operate. Bernstein analysts slapped "outperform" ratings on both Iris Energy and Riot Platforms, pricing them at $100 and $25 respectively, precisely because they already have grid-connected capacity and working operations in Texas. New entrants can't compete with that moat.
The audit was supposed to weed out non-viable and speculative projects that threaten grid reliability. Texas became the epicenter of data center competition because of its deregulated energy market, abundant natural gas, and business-friendly regulators. That same appeal flooded the system with applications it couldn't process responsibly. Abbott's move is less about blocking mining and more about forcing the queue to shrink before the grid buckles.
This article is informational and does not constitute financial advice. Cryptocurrency and energy markets carry significant risks.
