They say everything is bigger in Texas, and Tuesday’s midterm election results were no exception. While Republicans did poorly throughout the country, in Texas they faced political apocalypse. After going more than 30 years without winning a statewide race, Democrats swept every statewide office on the ballot. They also regained control of the state House for the first time since 2003. Texas Republicans retain a sizable majority in the state Senate and will have a 2–1 majority on the state’s Railroad Commission—which, despite what it says on the tin, actually regulates oil and gas. But overall, the change in political fortunes for the two parties has been stunning.
Texas is rightly known as an energy powerhouse, so it is reasonable to ask what these results mean for energy policy. When it comes to oil and gas regulation, you shouldn’t expect a radical change. This is in part because Republican control in the senate and at the Railroad Commission is sufficient to block anything that is seen as a major impediment to Texas’ oil and gas industry. But it’s also the case that Texas Democrats, while more liberal than the state as a whole, are still Texans. They didn’t campaign on opposition to fossil fuels, preferring instead an “all of the above” style of messaging. We aren’t likely to see a Green New Deal for the Lone Star State.
A Democratic House and governorship, though, will likely quiet one recurring energy battle. For the last several sessions, Texas Republicans have been split over measures to hamper the growth of renewable energy. Compared with states like California, Texas has relatively few state-level incentives for wind or solar power. Despite this, favorable weather conditions combined with the state’s competitive electric market and easy permitting system have helped make Texas the nation’s leading producer of wind and utility-scale solar power. Some Republicans have been unhappy about this and have sought to slow or reverse these trends via legislative action, while others have balked at the deviation from Texas’ market system that this would require. Given Democrats’ fondness for renewable energy, measures to penalize those energy sources are unlikely to get anywhere for the foreseeable future.
When it comes to the electric grid, things get trickier. Incoming governor Gina Hinojosa has pledged to direct the state’s Public Utilities Commission (PUC) to freeze retail electricity rates until lawmakers enact her preferred electricity reform legislation. One big problem with this idea is that the PUC lacks the legal authority to set retail electric prices. Texas has a competitive electric market, and outside of a handful of exempted areas it is not involved in setting or controlling retail electric prices. And while PUC commissioners are political appointees, Hinojosa’s ability to remove and replace them if they do not follow her directives could be stymied by the Republican-controlled senate.
Further, instituting price controls on electricity rates would not only be illegal, but it would also be—to use a technical term—a very bad idea. Retail electric providers in Texas do not own power plants themselves. They have to buy electricity from the wholesale electric market, and a price freeze could put them in a position of having to provide electricity to their customers for significantly less than it costs them to obtain it in the first place. This would be a recipe for market disintegration and ultimately a loss of electric reliability.
Hinojosa has also called for a moratorium on new data center approvals. If this happens, it could have repercussions that reach far beyond the state’s borders. And unlike some of Hinojosa’s other proposals, opposition to data centers in Texas has become a bipartisan pastime.
A quarter of planned data center capacity is in Texas. Data centers have been attracted to Texas because of its business-friendly tax and regulatory climate, as well as by its open and competitive electric market. But all this growth has provoked a backlash, particularly over concerns that data center demand will drive up electricity prices.
By the summer of 2026, Texas had more than 474 gigawatts of requests from large-load projects seeking to connect to its grid, mostly from data centers. That’s around five times the state’s all-time peak electric demand of 91 gigawatts. In reality, many of those projects will never materialize as some developers can’t secure financing or decide to locate elsewhere. Nevertheless, these big numbers have politicians spooked. In August, Governor Greg Abbott ordered a pause on new data center projects seeking new grid connections, and animosity toward the facilities has grown among both Republicans and Democrats.
In the years ahead, much will depend on how different political factions in the state adapt to the changed political reality. Will Republicans acquiesce to anti-data center proposals or adopt an attitude of uniform defiance. Will Democrats chart a moderate course in the hopes of solidifying their rule, or give in to their ideological id? And how well will a state party out of power for decades adjust to the hiccups of practical governance? As a philosopher once said, “the future is not set; there’s no fate but what we make.”
