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About 90% of ERCOT’s 474 GW interconnection queue is data centers — and regulators have finally noticed. The real exposure is not demand. It is political delay, and delay is what kills tax credits.
Texas is sitting on roughly 474 gigawatts of interconnection requests in the ERCOT queue. The state’s all-time record peak demand is more than five times smaller.
About 90% of that queue is data centers. That is not demand — that is optionality being hoarded, and regulators have finally noticed. Abbott ordered a statewide data center audit on August 3. ERCOT shelved its Batch Zero transmission study and went to the PUCT for a good-cause exemption on August 20. The ground has shifted underneath everyone holding a development pipeline. In Q1 2026 alone, at least 75 projects worth roughly $130 billion were blocked or delayed — matching all of 2025 in three months.
Opposition groups have doubled and now span 49 states. Over 300 state data center bills were filed in the first six weeks of the year. Maine came within a single House vote of a statewide ban. Data Center Watch called it “a structural shift rather than a cyclical spike.”
Here is what most people are getting wrong. The backlash runs on a belief that data centers are driving up retail power bills. Berkeley Lab’s work, summarized by CRS, found otherwise: from 2019 to 2025 the main drivers were grid infrastructure investment, natural gas prices, and disaster recovery.
So this is sentiment risk, not economics risk. Which means it expresses itself as delay. And delay is what kills tax credits.
If you did not begin construction by July 4, you are on the December 31, 2027 placed-in-service clock. A twelve-month permit fight is not a nuisance at that point. It is the entire credit.
Developing? Your offtaker’s permit is now your completion risk. Underwrite it like one. Lending or buying credits? Political risk stopped being a diligence footnote. Price the delay. Both are insurable — most people have not priced them yet.