Gina Hinojosa, the first Democrat elected Texas governor in 36 years, wants data centers to pay their own way, putting load growth behind long-dated ERCOT value under policy risk.
Texas voted for change. On 3 November, Democrat Gina Hinojosa defeated Governor Greg Abbott with 57% of the vote to 41% with two-thirds of precincts counted, the first Democratic win since 1990. Democrats also won the races for lieutenant governor, the US Senate seat and a seat on the Railroad Commission, which regulates oil and gas, while control of the Texas House was still undecided on 4 November.
During the campaign, Hinojosa said data centers would add about 600 USD a year to household bills and called for a moratorium on new projects until a special session, an end to subsidies, and disclosure of their power and water use. The shift in policy was not new in Texas, with Gov. Abbott halting permits for data center projects until the Public Utility Commission of Texas (PUCT) and ERCOT finish an interconnection audit. Once in office, Hinojosa will appoint PUCT commissioners as their terms come up, and the Legislature meets in January.
On 4 November, shares in Vistra fell ~14% in early trading, and KeyBanc downgraded the company citing “higher policy risk for names with large-load exposure”. Solar manufacturers rose instead, with First Solar up ~8% before the open, after Democrats also won control of the House and the Senate, raising hopes that wind and solar tax credits could be restored, although Democrats lack the majorities needed to override a presidential veto.
POLITICO reported on 4 November that analysts expect Hinojosa to act on her call for a day-one moratorium until the Legislature acts. Allianz estimated that 47 GW of planned US data-center projects now face moratorium risk, pointing to “a slower, costlier and more uneven buildout” rather than an abrupt halt.
We see the months before the Legislature and the PUCT set large-load rules as the period of highest policy risk. Texas generators and utilities whose growth plans rest on data-center contracts are most exposed, and the market began pricing this risk on 4 November, when Vistra shares fell.
Data-center load is the main source of the demand growth built into long-dated ERCOT forward prices. A moratorium, or rules that make large loads pay more of their grid costs, would slow that growth and lower the back end of the forward curve, which sets the value of 10- and 15-yr PPAs. Pexapark’s 10-yr ERCOT North solar Fair Value fell to 38.46 USD/MWh on 5 November, the first valuation to reflect the result, from 39.59 USD/MWh on 3 November, a 2.9% drop driven by lower forward prices, which cut the base value by 1.00 USD/MWh (1).
Battery offtake is exposed too, because sellers of 7-yr tolls and TB2 contracts have priced in wider spreads later in the decade, when data-center-driven demand growth outpaces new supply. Slower data-center growth would weaken that recovery, while tax-credit restoration would add more solar and storage, which also narrows daily spreads. Pexapark’s 7-yr TB2 Fair Value for ERCOT fell to 5.83 USD/kW-month on 5 November from 6.00 USD/kW-month on 3 November, as average top prices fell faster than bottom prices (1).
We expect corporate buyers to slow new long-dated ERCOT commitments until the PUCT and the Legislature set out large-load rules in early 2027, and sellers to keep offers firm while equipment costs rise. The effect on Fair Values will come through forward prices: if forwards price in slower load growth, long-tenor values fall first.
Buyers should favor shorter tenors or reopeners linked to large-load policy for ERCOT deals signed before the session. Developers and IPPs should test 10- and 15-yr offers and toll prices against a lower-load case, and data-center buyers should expect pressure to bring their own new supply.
Notes
(1) Pexapark Fair Values (Quant API, internal): ERCOT North solar, 10-yr, start 1 January 2028, as-generated, excluding balancing costs and including RECs; ERCOT Composite TB2, 7-yr, start 1 January 2028, Perfect including capacity (Perfect = average top minus average bottom minus round-trip efficiency loss, before the persistence discount). Valuation dates 3 and 5 November 2026; Fair Values use the previous trading day’s forward prices, so 5 November is the first valuation to reflect the election result. Over the same dates, 10-yr PJM Western Hub solar Fair Value fell 1.1%, so part of the move may be market-wide.
(2) Election results as reported on 4 November 2026; some races and the Texas House were not yet called. Share-price moves are intraday or pre-market, as reported.
(3) Unless stated otherwise, PPA prices and Fair Values are 10-yr, as-generated, exclude balancing costs and include RECs, with no negative pricing adjustment.
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