Texas power grid operators are preparing for an influx of data centers, and on Tuesday the Electric Reliability Council of Texas board will vote on a new process for evaluating which projects are actually feasible.

In the first quarter of this year alone, nearly 200 proposed data centers and other large energy users requested to join the grid. Currently, data centers and other high energy users are seeking a combined 438 gigawatts of power in Texas — more than five times the amount of electricity used to power the entire state during record-breaking demand.

But that number is likely inflated by proposed facilities that will never be built.

“I haven’t really believed the numbers for two years now,” University of Texas research scientist Joshua Rhodes said.

Why the Rush?

Texas has the fastest-growing data center market in the country and could lead the nation in this sector in the coming years, driven by the artificial intelligence boom. Cheap natural gas, available land, and a regulatory environment more friendly to gas power generators have attracted companies to the state.

A January report from Bloom Energy found that Texas grid demand driven by data centers is expected to exceed 40 gigawatts by 2028. In 2025, data centers in Texas had a maximum power demand of about 8 gigawatts, compared to the state grid’s peak energy demand of 94 gigawatts.

The Never-Ending Re-Study Loop

Rhodes said that in the past, data centers would go to their local utility providers and ask to join the power grid. But with so many data centers looking to connect, that’s no longer feasible.

It’s hard to evaluate whether there’s enough transmission equipment — such as power lines and transformers — to connect a data center to the grid in a given area, when other nearby projects are constantly being proposed.

“You end up in this never-ending re-study loop,” Rhodes said.

ERCOT’s new process would evaluate these projects in batches and weed out ones that are unlikely to materialize, using criteria such as whether the developer has the land, financing, and has already ordered components and equipment.

Matt Boms, executive director of the Texas Advanced Energy Business Alliance, said data centers will also have to make a financial commitment in order to be evaluated before joining the grid.

“The thinking there would be for large loads to put up some investment and some guarantee that they’re really coming to do business here in Texas,” he said.

If approved, the process will begin by evaluating a group of data centers and other large energy users known as “Batch Zero.” For more on Houston’s energy and industrial economy, visit Business of Houston.

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