Halt on Texas data center

Abbott slaps halt on Texas data center permits

The Republican governor directed state environmental regulators to stop issuing permits to data centers while an electricity audit is ongoing.

By Mike Lee

Texas Gov. Greg Abbott expanded his de facto moratorium on new data centers Monday, ordering environmental regulators to stop approving permits for the tech projects until an electricity audit is finished.

The Republican has now cut off major state-level approvals for data centers, blocking them from getting environmental permits or connecting to Texas’ main power grid.

“Simply put, Texans must come first,” Abbott said Monday. “Data centers must pay their own way, protect our grid and water, and complete the ERCOT and [water board] audits.”

The tightening marks Abbott’s latest effort to tamp down anger over data center development ahead of a tight election in November. He has pivoted in recent months after previously calling for Texas to be the “epicenter” of artificial intelligence development.

Abbott said state environmental regulators would halt approvals until they receive the results of an audit of data centers’ electricity use from the Electric Reliability Council of Texas, the state’s main power grid operator.

“Until they do, TCEQ will issue no permits sought by data center projects,” he said, referring to the Texas Commission on Environmental Quality, which oversees air and water permits. He also proposed working with state lawmakers next year to eliminate financial incentives for data centers.

ERCOT — the grid operator — has said the electric audit pausing connection approvals could last until December. Earlier this month, Abbott also told the Texas Water Development Board to crack down on data centers, saying the state agency should inform local law enforcement of any developers who refuse to provide information on their water use.

Rural voters and lawmakers from both parties have become alarmed by the growth of data centers, particularly after the industry started locating them far from the state’s cities in unincorporated areas. Critics have said the warehouse-sized centers are using up scarce water and driving up the cost of electricity.

President Donald Trump has even noticed Abbott’s shift on data centers — and called it a mistake.

Governors across the country are struggling to balance data centers with local concerns about quality of life. Virginia Gov. Abigail Spanberger (D) on Friday unveiled what she called the “highest standards in America” for data center power plants.

In Nevada, Republican Gov. Joe Lombardo signed an order Friday requiring data centers to pay the power costs associated with their projects, protect existing customers from higher bills and meet new standards on water use and grid reliability.

In Texas, Abbott may be on track to hold onto the governor’s mansion despite a range of headwinds against Republicans.

A recent poll conducted for a Dallas television station shows Abbott with a lead among registered voters — 48% to 41% for his Democratic opponent, state Rep. Gina Hinojosa. About 8% of respondents were shown as undecided.

Hinojosa has sought to blame him for encouraging the boom in data centers in the first place.

“Everywhere I go, rural voters tell me Greg Abbott stopped listening to them years ago,” she told POLITICO in August. “As governor, I’ll fight to put the people of Texas first, not the billionaire class.”

Hinojosa’s campaign didn’t immediately respond Monday to a request for comment.

Polls also have shown that many voters would oppose having a data center in their community.

The Data Center Coalition, an industry group, said in an email Monday that its members are complying with Abbott’s audit and other requests for information.

The group said it would work with the state “to resolve any outstanding questions and complete this review in a thorough and efficient manner so that our industry’s growth in Texas remains responsible, transparent, and responsive to the communities where our members operate.”

Abbott told environmental regulators to provide an update on their compliance with his latest directive by Oct. 19.