Source: Office of the Texas Governor, August 3rd, 20261
State and local officials set much of the rules that decide how fast US data centers connect to the grid and who pays for the power. Reuters reports that investors are watching state and local races because those authorities hold sway over the pace of development2. Texas and Pennsylvania acted through governors' orders1,3. New York and Ohio acted through utility regulators4,5.
The cost of grid upgrades is the question behind most of these rules. Pennsylvania's Executive Order 2026-05 states that data centers were responsible for $29.4 billion in capacity charges. That is 46% of the total across four auctions of PJM Interconnection, the regional grid operator, according to its independent market monitor3. New York's Public Service Commission has opened a proceeding on who pays for large-load connections4.
Most of the decisions come after November 3rd, 2026. Bank of America Securities (BofA) says the turning point for Texas investment arrives in the first half of 20276. The Electric Reliability Council of Texas (ERCOT) intends to finish its data center audit by December 10th, 20267. Analysts quoted by Reuters doubt that Congress would pass a bill that significantly stalls construction2.
On August 3rd, 2026, Governor Greg Abbott directed the Public Utility Commission of Texas (PUCT) and ERCOT to audit every data center moving through the grid connection process. A project that fails the requirements will be denied a connection1.
ERCOT was considering more than 474 gigawatts (GW) of connection requests, over five times the state's record peak demand. About 90 percent of the new requests came from data centers1.
On September 21st, 2026, Abbott directed the Texas Commission on Environmental Quality (TCEQ) to halt all permits sought by data centers until the ERCOT audit ends8. ERCOT's survey has more than 250 questions, and more than 400 projects must complete it9.
Gigawatts
Source: BigGo Finance, October 9th, 20266
Gigawatts of requested load
Source: BigGo Finance, October 9th, 20266
BofA summary of ERCOT's preliminary classification.
BofA, as summarized by BigGo Finance, says 204 projects were conditionally classified as base load, which can keep capacity once verified. Another 158 projects were classified as load under study, and their final approved capacity may be cut6.
Pennsylvania's Executive Order 2026-05, signed August 18th, 2026, covers data centers above 25 megawatts (MW) of peak demand. Their developers must sign a consent order with the state environmental agency to use a rolling permit review3.
The order says data centers were responsible for $29.4 billion in capacity charges to ratepayers across PJM's last four auctions. That is 46% of the total auction costs, according to the PJM Independent Market Monitor3.
In New York, the Public Service Commission (PSC) opened a proceeding on interconnection, cost allocation and tariffs for large loads. The grid operator's queue held 48 projects totaling over 11 gigawatts as of January 20264.
In Ohio, regulators adopted a data center tariff for AEP Ohio, the American Electric Power utility, on July 9th, 2025. A load study costs $10,000 to $100,000. A customer that cancels, or delays by more than 12 months, must reimburse 100% of buildout costs5. The Ohio Supreme Court is weighing an industry group's challenge to the tariff10.
Fox News counted 34 data center measures in seven states on the November 3rd ballot11. The GridSight tracker, citing Ballotpedia, counts 41 across 10 states, with 21 in Ohio12. The counts differ, and the Ohio concentration is common to both.
Ballotpedia reported that voters had decided four measures by September 28th, 2026, and in each case a majority favored greater limits on data center development13. GridSight counts six such earlier votes, all moving toward more limits12.
A yes vote does not always mean a limit. On referendums, yes upholds a decision officials already made, such as a rezoning or a development agreement, and keeps a project moving12.
In Ohio, voters in 18 municipalities and townships will decide the question. Nine petitions mirror a statewide effort to ban data centers above 25 megawatts. One proposed Meta data center in Piqua would demand around 1,400 megawatts of power14. In Wilmington, Amazon Web Services announced plans for a $4 billion data center, and residents have filed federal lawsuits over the city's handling of it14.
Courts shape the outcome as well. The city's alternative zoning ordinance in Wilmington is the fourth data center ballot measure to go before the Ohio Supreme Court in the last month14.
The Georgia Public Service Commission regulates utilities including Georgia Power. Its commissioners have final say over how the state's largest utility makes energy and how much customers pay for it15.
Two seats are on the ballot, and the elections are statewide, so all registered voters can cast a ballot for both15. BofA counts them as two of the commission's five seats6.
Georgia Power's next long-term plan is due in 2028, and a rate case follows, the first since 2022. Current commissioners expect the utility to file an update to its long-term plan next year to supply data centers15.
Reuters reports that analysts are dubious about national legislation that would significantly stall data center construction. Matt Gertken, chief geopolitical strategist at BCA Research, said the president would likely block such a bill2.
Stifel's chief Washington policy strategist, Brian Gardner, expects congressional hearings and investigations if control of Congress changes2.
The Federal Energy Regulatory Commission (FERC) oversees wholesale power, while state-level utilities set retail rates16. In mid-June, FERC issued orders requiring regional grid operators to justify their pricing structures within two months16.
BofA says the turning point for Texas artificial intelligence (AI) infrastructure investment comes in the first half of 2027. Even if the governor resumes a pro-growth stance, the audits, transmission oversight and legislative process already underway will continue, per BigGo's summary of the report6.
The same report cautions that the market may overstate election risk in some regions. It names Michigan, Kansas, Wisconsin, Florida and Arizona, where existing law, legislative groundwork or the make-up of regulators limits what a vote can change6.
Ed Mills, a political analyst at Raymond James, told CNBC on October 9th, 2026, that investors expect the opposition to fade after the vote, and he disagrees17.
But I think that after the midterms, things get worse
CNBC17
A Deutsche Bank election outlook quoted by CNBC says a small number of close seats can matter17.
a few seats can reset policy dynamics
CNBC17
Kevin Shea, senior equity analyst at BNY Wealth, said policy uncertainty is unlikely to derail the AI investment theme but can disrupt the timing and the cost2.
Ordered the ERCOT and PUCT audit on August 3rd and the TCEQ permit halt on September 21st. Says he will work with the Legislature next session to eliminate financial incentives for data centers1,8.
Signed Executive Order 2026-05 on August 18th. Data centers above 25 MW that want the rolling permit review must sign a consent order3.
Described tension between large AI data center builders and regulators, and a breakdown of communication in many instances16.
Confidence in the mechanism is high, because state and local actions are documented in official releases and filings. Confidence in the horizon is medium, because the audit has already pushed back ERCOT's study timeline7.
Analyst assessment. Each call is scored once its date passes.
ERCOT and PUCT publicly report completion of the data center audit, as shown on ercot.com or the PUCT open meeting record.
At least one Ohio municipality approves a ban on data centers above 25 megawatts, as certified by its county board of elections.
The Ohio Supreme Court issues a decision on the challenge to the AEP Ohio data center tariff, as shown on its public docket.
Confidence: medium to high. The assessment rests on official releases from Texas and Pennsylvania, a New York announcement, an Ohio utility tariff page, and reporting from Reuters, CNBC, Houston Public Media and WABE. Reuters and BofA both place the levers with state and local bodies2,6. The BofA findings come through a secondary summary by BigGo Finance.
Primary assessment: Texas, Pennsylvania, New York and Ohio each moved through a governor, a utility commission, a tariff or a local ballot. The near-term rules on permits and cost allocation sit with those bodies, and the seats and measures on the November 3rd ballot decide part of that group.
Strongest alternative: BofA expects the turning point for Texas in the first half of 2027, after the vote6. That reading is consistent with ours, and it moves the weight from the election to the audits and the legislative session.
What would change this view: a federal law or FERC order that overrides state limits, or court rulings that strike down local bans. Organizers in Grove City, Ohio, chose not to seek a local ban because they worried about litigation14.