Last week I said the era of announcing megawatts was over and the era of documenting them had arrived. This week the state added a third era, and it arrived on letterhead. On September 21 Governor Abbott sent a two-page letter to the executive director of the Texas Commission on Environmental Quality directing the agency "to halt all permits sought by data centers," and then, in a sentence that reaches well past TCEQ, declared that "no other state agency shall move forward with regulatory approvals related to data centers until this information is acquired." Three days later the Attorney General announced he was investigating "hundreds of data center developments" that did not return the state's water survey, and named 18 counties to start.
Between those two letters, the Public Utility Commission quietly finished the rule that will govern every large load interconnection in ERCOT from here on: $50,000 per megawatt of financial security, posted before ERCOT will even study you, with a 20 percent haircut if you withdraw after capacity is allocated. And the deals kept signing anyway. Vistra sold 207 MW of contracted power to a data center in Odessa, Kodiak Gas Services sold 76 MW of behind-the-meter engines to a West Texas operator, and Meta bought another 144 MW of Gonzales County solar. Five stories, one theme: the August pause has become a regime, and capital is routing around it in real time.
"No Other State Agency Shall Move Forward"
The August 26 ERCOT pause only reached grid-connected loads of 75 MW and up. That left the behind-the-meter campuses, the ones burning gas on site precisely so they never have to ask ERCOT for anything, outside the fence. The September 21 letter closes that gap. Every island-mode campus in Texas needs TCEQ air authorizations for its turbines and engines, and TCEQ now says it is not issuing them. Spokesperson Ryan Vise told Houston Public Media that "at the direction of Governor Greg Abbott, the Texas Commission on Environmental Quality (TCEQ) has paused the issuance of all air and water permits and authorizations related to the construction or development of infrastructure directly supporting data centers while ERCOT completes its comprehensive grid and community impact audit." TCEQ owes the Governor a compliance update by October 19.
What is sitting in that queue matters. The Texas Tribune's July inventory of pending data center air files included the Stargate campus in Abilene, which wants to add 41 more turbines and 18 more generators on top of what it already runs, Meta's El Paso campus with a new 366 MW gas plant, and Chevron's 2.5 GW to 5 GW gas complex in the Permian Basin, which Chevron has separately contracted to Microsoft for 20 years. None of those projects was ever going to show up in Batch Zero. All of them now need a state agency to move forward, and the state has told its agencies not to.
The letter also contains the sentence the industry should be reading twice: "Finally, I will work with the Legislature to eliminate any financial incentives for data centers." That is not an audit. That is a platform. The Data Center Coalition's Dan Diorio gave NBC DFW the industry's position in one line: "Work with us, put those guardrails in place, regulate us, but don't ban us." Bloomberg, working from Data Center Watch's tally, put the national context on the table the same day: at least 45 projects worth $68 billion were blocked or delayed across the country between April and June. Texas used to be where those projects went when somewhere else said no.
"Hundreds of Data Center Developments," a Class C Misdemeanor, and 18 Counties to Start
Last week I flagged the Governor's September 14 directive telling the Water Development Board to start referring non-responding data centers to prosecutors. On September 24 the prosecutor showed up. Attorney General Paxton's release says his office "is currently investigating hundreds of data center developments to ensure that they are transparent about their water usage and fully compliant with the law," and lists the counties under initial investigation, "including" Harris, Montgomery, Travis, Dallas, Tarrant, Smith, Bexar, Tom Green, Potter, Randall, Lubbock, Midland, Ector, Wichita, Victoria, Brazos, Nueces and El Paso. No company names. No project names. The word "including" is doing real work in that sentence, because the list is explicitly a starting point.
The statute is Water Code §16.012(m), and it is short. Fail to return the survey and you have committed a Class C misdemeanor, you are ineligible for TWDB funding, and you are "ineligible to obtain permits, permit amendments, or permit renewals" from TCEQ. Read that last clause next to the September 21 letter. The permit pause is discretionary and temporary. The permit ineligibility for survey non-respondents is statutory and does not lift when the ERCOT audit ends. A campus that ignored a water survey in 2025 has a permanent paperwork problem that no amount of December 10 reporting fixes.
The response rates explain the enforcement mood. TWDB surveyed 329 data centers in 2025 and got responses from nearly 30 percent, per the Tribune. For the 2026 round, TWDB's Temple McKinnon told the Senate Water, Agriculture and Rural Affairs Committee on September 2 that the agency sent 341 notices, refined the list to 324 after removing duplicates, and had a 30 percent response rate as of August 26. Seven in ten data centers in Texas did not fill out a water form that carries a criminal penalty. TWDB owes the Governor its own progress report on October 14, five days before TCEQ's. The state now has three agencies on staggered deadlines, and every one of them is producing a list of names.
$50,000 a Megawatt and a 20 Percent Haircut: The PUCT Adopts §25.194
The rule got almost no coverage, which is strange for a document that sets the price of admission to the largest interconnection queue in the country. At its September 18 open meeting the Commission adopted new 16 TAC §25.194 in Project 58481, the SB 6 large load interconnection standards, with changes from the March draft. The order runs 270 pages across three PDFs. The provisions that will show up in term sheets fit in a paragraph.
The rule applies to any large load customer not energized as of the effective date that seeks a new interconnection of 75 MW or more at a single site, an expansion that crosses 75 MW, an expansion of 75 MW or more on a site already above it, or co-location with a generation resource. Before ERCOT includes you in an interconnection study, you sign an intermediate agreement, make your disclosures, and post $50,000 per MW of financial security. When the standard large load interconnection agreement is executed, the security resets to the greater of $50,000 per MW of contracted peak demand or the system upgrade costs allocated to you by the study. The separate "interconnection fee" from the proposed rule is gone. Withdraw before the study begins and you get all of it back. Withdraw after ERCOT has allocated transmission capacity to you and ERCOT keeps 20 percent of the security tied to that capacity. Once you energize, 20 percent comes back, and the rest returns in 20 percent increments as you hit the minimum billing demand milestones in your agreement. Submit false, inaccurate or unverifiable information, including in a Planning Guide Section 9 filing, and the security can be forfeited and the capacity reallocated. Refuse to cooperate with the audit and the order points at enforcement, penalties and loss of allocated capacity.
Do the math on a 500 MW request. That is $25 million posted before a study, a $5 million forfeit if you walk after allocation, and a return schedule that stretches across your ramp. The Commission adopted the refundability language proposed by Black Mountain, Skybox and the Texas Energy Buyers Alliance, rejected the 10 percent cap the wind and clean power associations asked for, and declined to prioritize load types or touch base-versus-studied eligibility, which stays with PGRR 145. Batch Zero loads must execute an SLLIA at the conclusion of the batch study. The updated implementation roadmap staff filed September 22 in Project 58317 says the SLLIA form itself gets a proposal for publication in October and adoption no later than March 2027, the demand management rule in Project 58482 gets its adoption order in January 2027, and the transmission cost recovery rewrite in Project 58000 lands in December, once staff finishes synthesizing 909 pages of comments. The order does not state an effective date; under the standard 20-day clock it should take effect in early October. Watch the Texas Register.
The Deals Did Not Wait: 207 MW in Odessa, 76 MW Behind the Meter, 144 MW of Solar
On the same Monday the Governor halted permits, New Era Energy & Digital announced a 20-year power purchase agreement between its subsidiary TCDC PowerCo and Luminant ET Services Company, a Vistra affiliate, for a minimum of 200 MW and up to 207 MW at the Texas Critical Data Center in Odessa. The power comes from what New Era describes as Vistra's 1,180 MW gas plant immediately adjacent to the 493-acre site; Vistra itself called the Odessa plant 1,054 MW of combined cycle when it bought it in 2017. Delivery is expected in the third quarter of 2027. Vistra gets a 5 percent non-voting interest in the powered portion of the project, a right of first refusal on future TCDC phases, and a right of first offer on other New Era projects. Chairman and CEO Charlie Nelson called it "an incredible milestone which we believe materially reduces phase one development risk at TCDC."
The interesting part is what it replaced. On February 27 New Era, then under CEO Will Gray, announced a 450 MW behind-the-meter plan for the same campus with Thunderhead and Turbine-X, and Gray called behind-the-meter "the definitive solution." Seven months, one CEO change and one Governor's letter later, phase one is a grid-supplied PPA from an existing plant, no new turbines, no new air permit, and a generator holding equity in the load. Ector County, where the campus sits, is on the Attorney General's list. That is the shape of a deal built to survive September 2026: existing steel, an incumbent counterparty, and nothing that needs a state agency to move forward.
Kodiak Gas Services went the other way. Its September 21 release announced a 76 MW behind-the-meter baseload contract with an unnamed West Texas data center operator, roughly 40 reciprocating gas units, a six-year term, deployment starting in the fourth quarter of this year and scaling into the first quarter of 2027. The operator's tenant is an investment-grade hyperscaler, and a "GPU designer" is guarantor on the lease. CEO Mickey McKee said "the size fits our available power fleet, the location is within our established operational footprint in West Texas, and the customer has strong commercial and financial support." It is Kodiak's second data center power contract on the way to a stated 2 GW by 2030. Forty engines on a pad need TCEQ authorizations, and the release went out the same day TCEQ stopped issuing them. Either those authorizations are already in hand, or that Q4 start date just became the most interesting line in the release.
And Meta, which has never once slowed a Texas procurement for a Texas headline, signed a 144 MW PPA with Apex Clean Energy for Starling Solar in Gonzales County on September 16. Apex says commercial operation in 2027; the ERCOT queue lists January 2028. It is the third Apex-Meta deal in Texas after Aviator Wind East and Angelo Solar, and the seventh overall. Meta takes the environmental attributes. Nobody in the release mentioned an audit.
Batch Zero Update: The Deadline Passed, and Nobody Published a Count
The 231 notarized verification questionnaires were due at 5 p.m. on September 23. As of this writing ERCOT has not said how many came in. The last public number is the one I printed last week, zero submitted as of September 11, and ERCOT's own deck promised that "future updates will include data center response rates." What ERCOT did file, on September 21 in Project 59142, is the full set of question reference guides for both RFIs, along with a note that recipients may request an extension to September 30 and that the RFI was revised to version 1.1 on September 19, mid-window, for changes ERCOT describes as technical or typographical. The community impact survey, the one that goes to 461 projects, is still due October 12. So the honest scoreboard is: deadline passed, extensions available for a week, no response rate published, and the next hard number is whatever ERCOT chooses to disclose before December 10.
The docket filled up with everyone the audit has not yet reached. Sixteen filings landed between September 11 and 14 from residents of Archer County asking the Commission to apply the audit specifically to Project Raptor, a 1,000 MW campus on roughly 2,800 acres on Three Way Road that the county's own FAQ identifies as Google's, connecting at a Bowman switch station on the property with partial operation in 2028 and full build in 2031. One couple's filing put the distance at 1,200 feet from their home. Wichita County next door is on the Attorney General's list. Separately, Synergen Green Energy asked for a good-cause exception to enter Batch Zero for a roughly 300 MW green ammonia plant in Calhoun County, in STEC territory, with $30.5 million spent and $568 million budgeted, and made the argument every non-data-center industrial in Texas is now making: "industrial large loads should not be collateral to the onslaught of large computational loads." Synergen notes ERCOT's August 10 filing acknowledged 41 good-cause requests. None are on the October 1 agenda.
One correction to the framing I have been using. The medium loads, 25 MW to under 75 MW, are not a footnote. ERCOT's September 11 filing counts 214 medium-load projects totaling 12,535 MW receiving the community impact RFI, up from the 157 facilities and roughly 8,800 MW ERCOT described as an April snapshot. That is 12.5 GW of data center and crypto load that was never in Batch Zero and now has its own questionnaire, its own deadline, and its own place on the Governor's list.
What to Watch Next Week
Wednesday, September 30: Senate Business and Commerce, 9:00 a.m., E1.012. Chairman Schwertner's interim charge includes a review of "ERCOT's proposed changes to its interconnection process to determine what guardrails should be enacted." The Governor has already said he wants the incentives gone. Listen for whether the committee agrees. It is also the last day for extended verification RFI responses.
Thursday, October 1: PUCT open meeting, 9:30 a.m. Docket 59115, the Silver Basin Digital Infrastructure 180 MW co-location behind the 204 MWac Taygete II solar plant in Pecos County, is up for discussion and possible action after initial briefs on September 23, with ERCOT proposing a 30-minute curtailment condition. The Comanche Peak net metering docket, 59399, and the Haskell data center docket, 59943, are on the same agenda. These are the first SB 6 co-location cases to reach decision.
Tuesday, October 6: ERCOT SB 6 Large Load Curtailment Workshop, 9:30 a.m. The proposed operations framework and registration process for the curtailment obligation that comes with every one of these interconnections.
The effective date of §25.194. Watch the Texas Register for the Secretary of State filing. Every SLLIA negotiation in the state is waiting on it, and the SLLIA form itself is not due for publication until October.
October 12, 14 and 19. Community impact RFI due, TWDB's enforcement update to the Governor, and TCEQ's compliance report, in that order. Three lists of names in eight days.
Disclaimer: The Grid Report is Barrio Energy's market intelligence product. Nothing here is investment advice, and Andi is not your broker. Links go to primary sources wherever possible; form your own view.
