⭐ Morning Briefing — Texas & DFW AI Data Centers, Grid, Land Use

(Latest updates through August 24, 2026)

Top Story: State regulators and industry groups warn Texas's abrupt pause on data centers and 765-kV power lines risks the very blackouts it's meant to prevent — even as the fight over Gov. Abbott's freeze becomes a defining issue in both the Senate and governor's races.

📰 Today's News

1. ⚡ Regulators Warn Texas's Data-Center Freeze Could Trigger the Blackouts It's Trying to Prevent

• A coalition letter — from the Texas Oil and Gas Association, Texas Chemistry Council, Texas Association of Manufacturers, and electric-company trade groups — sent to Gov. Abbott, Lt. Gov. Dan Patrick, and House Speaker Dustin Burrows on Wednesday warned that "avoidable delay is not a neutral choice for ratepayers," arguing reliability failures and congestion will ultimately cost Texans more than building the infrastructure now.
• The State Office of Administrative Hearings recommended, in a ruling issued Thursday, that the PUC reject a portion of the West Texas 765-kV transmission buildout — the first time SOAH has taken that stance on any leg of the project — with final PUC decisions on five pending line applications expected within the next couple months.
• Following a House Committee on State Affairs hearing Wednesday, a bipartisan group of 30 state representatives called on the PUC to deny the transmission line applications outright, which would effectively kill the project in its current form and send lawmakers back to rework the 2023 law (House Bill 5066) that cut landowners' review window from 365 to 180 days.
• ERCOT's interconnection queue now holds nearly 2,000 requests to be energized — 90% of them data centers — totaling 466,497 megawatts of demand, more than five times the grid's July 22 peak-demand record; ERCOT officials testified Wednesday that several projects have already dropped out of the paused Batch Zero large-load study because of the delay, which the grid operator still hopes to complete by April even as Abbott's separate audit isn't expected to wrap until December.
• The Permian Basin's West Zone saw average demand grow 12.3% in 2025 (versus 6.1% statewide) and congestion rise 27%, with ERCOT's own chief operating officer testifying in July that rolling blackouts are possible there by next summer if the transmission buildout stalls.

Today's Signal: The PUC's five commissioners — all Abbott appointees — now have SOAH's recommendation to reject one segment on the table alongside four other pending applications, meaning the governor's own regulators, not just legislators, could end up deciding whether the 765-kV buildout survives.

2. 🗳️ Data Centers Split Both the Senate and Governor's Races Wide Open

• Texas Attorney General and GOP Senate nominee Ken Paxton unveiled a four-point plan today — first reported by Fox News Digital — that pairs two federal bills he'd author (barring Chinese technology from powering U.S. data centers and creating criminal liability for centers that let AI chatbots endanger children) with a push to repeal the state sales-tax exemption for data centers he voted for as a freshman state senator in 2013, plus continued support for Abbott's grid-connection freeze.
• Democratic Senate nominee James Talarico countered with his own plan to repeal the state tax exemptions, require data centers to cover 100% of their own grid-connection costs, mandate closed-loop water recycling, and give local governments veto power over new projects — while his campaign accused Paxton of taking nearly $500,000 from data-center-linked PACs and ignoring Hood County residents fighting a local project.
• Paxton's campaign fired back that Talarico's Lone Star Rising PAC has collected roughly $10 million from LinkedIn co-founder and data-center advocate Reid Hoffman, meaning both Senate campaigns are now fielding the same donor-conflict attack from the other side.
• In the governor's race, Democratic nominee Gina Hinojosa renewed her call today for Abbott to convene a special legislative session on data centers, framing his own audit as Abbott "basically auditing himself," while Abbott maintained this week that his pause is "working" and cited roughly 1,800 halted data center projects statewide as evidence.
• Politico reports the same dynamic is playing out nationally — Pennsylvania Gov. Josh Shapiro and Michigan GOP Senate nominee Mike Rogers have both embraced data-center curbs this summer, and a Senate Republican campaign memo has warned the backlash is already hurting incumbents like Ohio's Jon Husted.

Today's Signal: With Texas early voting weeks away, expect Paxton's and Talarico's dueling data-center plans — and Hinojosa's special-session demand — to keep surfacing in Senate and governor's race advertising through November.

Quiet today on TCEQ air-permit filings in the eight tracked DFW-area counties, on new hyperscale land purchases or construction filings, and on behind-the-meter generation announcements.

📍 Today's Watch List

Actionable Signals for Monday, August 24

• The PUC's decisions on the five pending 765-kV transmission-line applications, expected within the next couple months, after SOAH recommended rejecting one segment on Aug. 20.
• Whether ERCOT's Batch Zero large-load interconnection study still hits its April completion target now that Abbott's separate audit — not expected to wrap until December — has paused the batching process.
• Whether Abbott responds to Gina Hinojosa's renewed call for a special legislative session on data centers.
• Paxton's promised Senate bills targeting Chinese technology in data centers and AI-chatbot child safety, and whether he formally co-sponsors Sen. Tom Cotton's DATA Act.
• The Athens City Council's Monday, Aug. 24 vote on banning data centers and battery storage citywide.
• The outcome of the Tarrant County lawsuit over Westlake's proposed Circle T data center, still working through the courts after Keller's TRO and injunction fight.