Texas Implements Power Grid Restrictions for Data Centers Amid Rising Energy Demands

Texas has become the first state to enact rules temporarily disconnecting major data centers from its power grid. The MOVE follows the 2021 winter freeze that caused widespread outages and fatalities. Regulators now require utilities to curtail power to large customers during supply shortages, aiming to prevent systemic failures during extreme weather events.

The policy reflects a growing tension between infrastructure expansion and energy constraints. Data center proliferation—fueled by the AI boom since ChatGPT's 2022 debut—is outpacing grid capacity nationwide. Similar debates are emerging in the 13-state PJM Interconnection region and other areas where server farm growth exceeds new power generation approvals.

Tech companies and operators oppose the measures, citing reliability concerns for round-the-clock services. Yet the energy appetite is undeniable: Texas planners project steep load growth, with data centers constituting a major portion. "Data center flexibility will be expected, required, encouraged, mandated, whatever it is," says University of Texas engineering professor Michael Weber.