Gov. Greg Abbott yesterday halted approvals for new data centers until the state can audit the ones looking to connect to Texas' electric grid.

Why it matters: Abbott has signaled a desire to make data center regulation a top priority as he seeks reelection and ahead of a new legislative session next year.

• Data centers have drawn increased scrutiny amid backlash to AI.

The latest: Abbott directed the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to deny grid connection to any project that doesn't meet requirements.

By the numbers: About 90% of new connection requests for the Texas grid are data centers, Abbott says.

• ERCOT, the state's grid operator, is considering more than 474 gigawatts of requests — more than five times Texas' record peak electricity demand, Abbott added.

Zoom in: Among the information the governor is seeking from data center projects is:

• The extent to which a center is seeking state and local tax incentives.
• Whether a data center developer plans to provide some of its own electricity, and a center's estimated annual and peak electric consumption.
• A data center's projected annual and peak water consumption and its water sources.
• Any measures a project is taking in regard to noise mitigation, light controls, emergency response coordination and more.

What they're saying: "Our top priority is to protect Texans' safety and quality of life," Abbott said in a statement. "Texans must come first."

• "Done correctly, this review can showcase the good actors in the data center industry rather than delaying them unnecessarily," Dan Diorio, executive vice president of state policy and government affairs for the Data Center Coalition, tells Axios in a statement.

Between the lines: Democratic gubernatorial candidate Gina Hinojosa last month called on Abbott to halt data center construction across Texas.

• "So nice to see another strongly worded letter from Abbott after he proudly made Texas the Wild West of data centers," Hinojosa said in a statement yesterday.
• "Abbott's call for a 'pause' could be for one day – and no one buys it."

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Meanwhile, Texas has become the epicenter of the AI industry's bet that data centers can bypass the electric grid.

Why it matters: The state has more announced off-grid data center capacity (40,186 megawatts) than anywhere else, but recent setbacks are raising questions about whether the strategy can deliver on the AI industry's boom.

The big picture: Rather than waiting years for utility hookups, AI companies are increasingly building data centers powered by on-site gas turbines, generators and fuel cells.

• Research firm Cleanview identified 59 planned "behind-the-meter" data centers totaling roughly 90 gigawatts nationwide — more than a quarter of all planned U.S. data center capacity.
• Texas accounts for the largest share because of its natural gas resources, pipeline network and favorable regulatory environment.

State of play: The approach has hit several snags recently.

• Crusoe's Stargate campus in Abilene reportedly experienced days-long outages tied to power and cooling equipment.
• In New Mexico, regulators rejected a gas pipeline needed for Oracle's Stargate Project Jupiter, potentially delaying the project for years.

What they're saying: Critics argue off-grid projects could prove slower, costlier and less reliable than simply expanding the electric grid.

A 2-year-old girl who was the subject of an AMBER Alert Sunday evening was found unresponsive near her Northwest Side home and later pronounced dead. A police investigation is underway. (KSAT)

💰 Mayor Gina Ortiz Jones wants to put a $489 million contribution for a new Spurs arena — which the City Council already approved — as a measure on the November ballot, saying voters should have a say.

• City Council has until Aug. 17 to place the measure on the ballot, though it's unclear if there's enough support. (SA Business Journal 🔑)

🏈 Texas schools must adjust outdoor sports practices based on heat stress levels under a new safety rule. (KERA)

The San Antonio Water System (SAWS) is easing water restrictions to Stage 2 Tuesday after recent rainfall boosted Edwards Aquifer levels.

Why it matters: The move ends the stricter watering rules San Antonians have lived under since June 2024.

Zoom in: Recent rainfall pushed the Edwards Aquifer's 10-day average above the Stage 3 trigger of 640 feet above mean sea level.

How it works: Under Stage 2, customers may water landscapes with irrigation systems, sprinklers or soaker hoses once a week between 5-10am or 9pm-midnight, based on the last digit of their address.

• Watering by hand-held hose remains unrestricted.
• Stage 3 drought surcharges on single-family households using more than 20,000 gallons of water per month will end.

What they're saying: "Stage 3 drought rules, combined with our diversified water resources, have helped us weather this historic drought," SAWS conservation director Martha Wright said in a statement.

"Hadestown: The Musical" debuted with $10 million recently, surpassing "Hamilton" for the biggest opening ever for a live theater film.

Why it matters: The record-setting debut suggests theatrical releases could become a bigger business for Broadway productions, creating new audiences — and new revenue — beyond the stage.

Catch up quick: The Tony Award-winning musical, which premiered on Broadway in 2019, reimagines Greek mythology through American folk and jazz. Producers chose a nationwide theatrical release over streaming, hoping to turn the filmed performance into a shared event.

• Producer Mara Isaacs tells Axios the strategy also helps reach people who've never had the chance to see the show because of cost, geography or awareness.

What's next: The film's initial run has already been extended as producers weigh future distribution options.

• Santikos Palladium, Casa Blanca and Embassy have showings today and tomorrow.
• Broadway fans are spoiled this week — see "Hadestown" at the movies, then catch "Hamilton" live at the Majestic Theatre through Sunday.