Governor Greg Abbott has flipped the script on Texas’s long courtship of big power users. On June 10 he told state regulators to make AI cloud providers, Bitcoin miners, and other data centers fund the electric grid they strain – and to stop passing those costs to households.
The directive targets the $3.2 billion sales tax break Texas hands out over two years to 121 qualifying facilities. That exemption waives the state’s 6.25% levy on everything from servers to cooling systems – and on the enormous electricity bills these sites run up.
Texas spent a decade becoming the easiest place in America to build a data center. Cheap land, cheap power, and that tax break drew a pipeline now totaling 6.5 gigawatts under construction, roughly a fifth of the national total. JLL forecasts the state could overtake Northern Virginia as the world’s largest data center market by 2030.
But the math has shifted. ERCOT set an all-time peak of 85,508 megawatts in August 2023. The grid operator’s long-term forecast now envisions peak demand of up to 367,790 megawatts by 2032 – more than quadruple that record. Large-load interconnection requests surged 270% in 2025 to roughly 226 gigawatts.
Abbott’s letter to the Public Utility Commission and ERCOT gives them a clear mandate: require data centers to fully fund the new electric infrastructure built to serve them. He ordered the PUC to start lowering residential transmission costs by the end of July. Both agencies must deliver a joint memo by July 17 spelling out what they can do under existing rules and what needs new legislation in 2027.
The governor also wants water-efficient cooling mandates, mandatory reporting on power and water use, and a hard review of whether the sales tax exemption should survive.
For crypto traders, the indicator is direct. Texas is the world’s largest Bitcoin mining hub. Any move to kill the tax break or impose grid-cost recovery will squeeze miner margins in the state. The comptroller’s office estimates the exemption will cost $1.3 billion in forgone revenue this year alone – money Abbott now wants back from the industry.
The July 17 memo will likely outline the first concrete steps. Until then, miners and AI operators face a regulatory shift that could become a template for other states watching their own grids strain under the AI buildout.
Texas Governor Demands AI, Bitcoin Miners Pay for Grid
Texas is requiring AI and data centers, including Bitcoin miners, to pay for the electricity grid costs they impose. This policy shift aims to stop residential customers from subsidizing these rapidly growing industries.