On August 3, 2026, Texas Governor Greg Abbott halted all data center projects in the Texas connection queue ..
In a letter to the PUCChairman Thomas Gleeson (Public Utility CCommission—the Texas regulatory agency for electric and water utilities) and ERCOTCEO Pablo Vegas (Electric Reliability Council of Texas—the operator of the Texas power grid—has instructed Abbott to conduct a comprehensive review of every data center as part of the connection process. No new projects will be approved until this audit is complete.
The reason for this is the staggering size of the connection waiting list:
It now includes over 1,800 projects with a total capacity of more than 474 gigawatts—more than five times Texas’s previous peak electricity consumption.
About 90% of the applications are for data centers.
In the future, anyone wishing to pass the review must disclose subsidies and tax benefits, electricity and water consumption, the planned power source, the ownership structure, and the impact on the community. Pure “behind-the-meter” projects—which generate their own electricity on-site and do not connect to ERCOT in the first place—are not affected.
What could this mean for Neoclouds?
The key point is that existing, already approved capacity remains unaffected—only future growth.
Bernstein sees $CIFR (-11,43%) , $CLSK (-9,82%) and $CORZ (-6,48%) as being most at risk, since their short-term expansion depends on new grid connections in Texas.
$RIOT (-11,32%) , $IREN (-11,51%) and $WULF (-7,71%) are considered relative beneficiaries, as they already have approved grid connections.
Even $CRWV (-10,62%)connections could be affected by delays, according to Bernstein.
In my view, this is the opportunity: As permits become scarcer, the value of what has already been approved increases.
Overall, it can be seen that approvals for future grid connections will become more difficult and the processes will take longer. Consequently, there will also be some rejections, which could pose a major risk for some Neocloud providers. Company valuations based on a 2027/28 pipeline thus become less predictable—and delays cost money in debt-financed construction projects, regardless of whether approval is ultimately granted.
Concrete progress is expected on August 20: On that date, ERCOT plans to apply to the PUC for an extension of the deadlines for the proceedings—specifically for the first round of approvals, the results of which were originally supposed to be available by August 7. There is currently no deadline by which the review must be completed—it will therefore be crucial whether the agency specifies a timeline or leaves the process open-ended.
Sources:
www.theblock.co/post/410545/bernstein-texas-data-center-audit
