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Gov. Abbott's data center audit is underway. Here's what ERCOT is asking.

Several compute units inside a data center located just outside of the City of Brazoria.
Kyle McClenagan
/
Houston Public Media
Several compute units inside a data center located just outside of the City of Brazoria.

The Electric Reliability Council of Texas, or ERCOT, has made public the data center community impact survey that more than 400 projects must complete as part of an audit ordered by Gov. Greg Abbott last month.

The governor has ordered a pauseon approvals for new, large data center projects that want to connect to the ERCOT grid until the state's utility and power grid regulators complete an audit of the projects.

The survey, which includes more than 250 questions, is divided into nine sections: facility information, reasons for development, financial assistance, power self-sufficiency, water sources and consumption, cooling technologies, community impact, ownership and controlling interests, and an attestation confirming that the survey responses are accurate.

University of Houston Energy Fellow Ed Hirs said the survey goes beyond what ERCOT needs to determine what projects to connect to the grid. While questions about data centers' energy and water usage are relevant to state regulators, Hirs said developers may chafe at questions that ask about their projects' finances and ownership.

"This is going to be considered to be very, very intrusive in a state that usually has a good reputation for free market principles," he said.

Hirs said the survey may deter some data center developers from building in Texas.

"What this survey kind of communicates with everybody is that the state is looking to regulate all of these different aspects, and that will change the economics for the developers," he said.

ERCOT did not immediately respond to a request for comment Friday about criticisms of its community impact survey.

The community impact survey includes 247 large data centers, classified as projects that are requesting at least 75 megawatts of power from the Texas grid. It also includes 214 “medium” data centers, which are requesting between 25 and 75 megawatts of power from the grid. One megawatt can power about 250 Texas homes during a hot summer day or cold winter night, according to ERCOT.

Data centers will have until Oct. 12 to complete the survey. ERCOT said it may publicize responses in the aggregate, but individual survey answers will remain confidential.

Projects that do not complete the survey will be reported to the Public Utility Commission of Texas and the governor's office. Spokespersons for the governor’s office and the commission did not immediately respond to a question about what penalties these projects may face for failure to complete the survey. Rich Parsons, a spokesman for the Public Utility Commission of Texas, previously said in an email that those situations “would be addressed on a case-by-case basis.”

Texas has the fastest-growing data center marketin the country. As of late July, large energy consumers had requested474 gigawatts of electricity from the Texas power grid, more than five times the amount of energy needed to power the state during record-breaking demand. Roughly 90% of the requests came from data centers.

But even as Texas has seen an influx of proposed data projects, it's struggled to assess how much water these facilities will use. Data center developers have failed to respond to water usage surveys from the state, according to the Texas Tribune.Gov. Greg Abbott has orderedthe Texas Water Development Board to penalize developers who did not respond to its past survey and help ERCOT develop its data center audit.

The audit survey released Friday includes questions about how much water these projects are using, the source of the water used, wastewater produced, and other cooling methods used by these projects.

In addition to the survey published Friday, ERCOT and the Public Utility Commission of Texas are conducting a "verification" process for data centers included in "Batch Zero" — a group of large data centers that the agencies are evaluating so they can connect to the state's power grid.

The verification process will confirm that these projects are actually ready to be built — for example, by providing a lease or property deed and permits. This “verification” process does not involve evaluating data centers’ water usage, noise or other community impacts.

Once ERCOT completes the "verification" process and the community impact survey, it will complete a report about the findings of its audit in December. The agency has said it will share its findings with the state’s utility regulators, the governor and state lawmakers.

Maria Faconti is a partner with the law firm K&L Gates, which specializes in Texas' energy regulations. She said some of her clients have already begun to anticipate that the governor may require data centers to bring their own power generation, rather than connecting to the state's power grid, and are beginning to plan accordingly.

As the legislative session begins early next year, Faconti said, developers will be watching to see what new regulations become law.

"I think there are a lot of people who think that the legislature will make changes, but no one knows really what those changes will be," she said. "So it's hard to plan for something that's currently not predictable."
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