Daily Digest — September 22, 2026
Texas Governor Abbott Halts All State-Issued Data Center Permits Pending Grid Audit
Texas Governor Greg Abbott has ordered the Texas Commission on Environmental Quality (TCEQ) to halt all state-issued permits for data centers, according to multiple reports. The freeze will remain in place until the Electric Reliability Council of Texas (ERCOT) completes a comprehensive audit examining data center power use, tax incentives, and water consumption. This is Abbott's fourth directive related to data center expansion, building on an August moratorium on new data center grid approvals.
The directive mandates that data center projects must:
- Cover all electrical infrastructure costs
- Contribute to lower residential electricity bills
- Complete all required ERCOT and Texas Water Development Board (TWDB) audits before permits are issued
Abbott also directed the TWDB to enforce penalties for data centers failing to comply with water usage reporting requirements under the Texas Water Code, as reported by The Center Square. The governor announced plans to work with the legislature next year to eliminate financial incentives for data centers that were established roughly a decade ago.
The action comes amid growing public opposition, particularly from rural communities concerned about demands on the power grid and water resources. According to CNBC, data center expansion has become a contentious political issue ahead of the 2026 midterm elections, with recent polls indicating public skepticism toward local data center development. The TCEQ is expected to provide an update on its compliance with the governor's order by October 19. As noted by the Austin American-Statesman, Attorney General Ken Paxton has separately initiated an investigation into a data center project in Taylor over potential parkland use concerns.
Texas Gov. Abbott Halts All State-Issued Permits for Data Centers Until Grid Audit Is Complete
mb.ntd.com
Abbott pauses new data center permits as rural Texans raise concerns over growth
CBS19
Abbott orders a halt on all data center permits
The Center Square
Abbott orders halt to Texas data center approvals pending state audit
Austin American-Statesman
Texas Gov. Abbott orders data center permit halt weeks after issuing moratorium
CNBC
California Governor Newsom Signs Seven Bills Regulating Data Centers
California Governor Gavin Newsom signed seven bills into law regulating the state's data center industry, according to multiple outlets. The legislation addresses electricity cost-shifting, water usage disclosure, and environmental review requirements.
Key provisions include:
- **Electricity costs:** SB 886 and AB 2383 direct the California Public Utilities Commission to establish rates ensuring data centers bear the full costs of grid connection and necessary upgrades. SB 1168 also addresses cost-shifting.
- **Water disclosure:** AB 2469 prevents local governments from approving new or expanded data centers until developers provide projected water use. AB 2619 requires operators to report estimated or actual water consumption. AB 1577 mandates annual energy usage and efficiency reporting to the California Energy Commission.
- **Environmental review:** SB 887 removes data centers from broad environmental review exemptions, though projects meeting state conservation standards can receive streamlined review.
As reported by the Los Angeles Times, the action follows a surge of local opposition across California, with cities including Oakley, Gilroy, Richmond, and Monterey Park enacting moratoriums or bans on data center development. A Public Policy Institute of California poll found 73% of residents oppose new data center construction in their communities.
The Data Center Coalition, whose members include Google, Microsoft, and OpenAI, opposed the legislation, arguing it could hinder California's competitiveness, according to CalMatters. The signing marks a reversal for Newsom, who had previously vetoed similar disclosure legislation, as noted by HSJ Chronicle.
Newsom Signs Seven New Laws Regulating Data Centers Amid Statewide Backlash
SFist
Newsom Signs New Restrictions on Data Center Development
KQED
Newsom Signs New Restrictions on California Data Centers Amid Growing Public Backlash
hsjchronicle.com
Newsom clamps down on California data centers as voters turn against the industry
CalMatters
Newsom signs bills to regulate data center industry, criticizes Trump for inaction
Los Angeles Times
Spartanburg County Approves Data Center Moratorium With Significant Carveouts
The Spartanburg County Council gave final approval to a 12-month moratorium on new data centers on September 21, but the measure includes several notable exceptions, according to the Post and Courier. Data centers with an electrical load below 65 IT megawatts are exempt, as are facilities located within a named industrial park or on a former industrial site that do not self-generate power beyond emergency backup. Cryptocurrency mining operations are also excluded.
Exempt facilities must submit plans addressing light, glare, noise, and landscaping, cannot be located within one mile of another data center, and must enter into a development agreement with the county. As reported by FOX Carolina, the moratorium passed with several amendments after lobbying efforts.
South Carolina Regulators Approve 457-Megawatt Permit for Spartanburg Data Center
The South Carolina Department of Environmental Services (DES) has granted a permit to NorthMark Strategies and Valara allowing their Spartanburg data center to generate 457 megawatts using natural gas turbines, according to the Post and Courier. The expanded permit authorizes 11 new natural gas turbines adding 408 megawatts to the 48 megawatts already permitted.
The permit includes quarterly reporting requirements for the first year and rolling 12-month limits:
- Volatile organic compounds: 250 tons
- Hazardous air pollutants: 25 tons total, 10 tons per individual pollutant
- Nitrous oxide: 250 tons
The Southern Environmental Law Center (SELC) criticized the decision, with senior attorney Catherine Wannamaker stating that DES failed to restrict harmful air emissions and potentially increased local cancer risks from formaldehyde. As reported by FOX Carolina, Spartanburg County leaders questioned pollution monitoring protocols at a Public Safety Committee meeting, particularly around formaldehyde emissions not being continuously monitored.
A special meeting was also scheduled at the Spartanburg County Administrative Office to discuss the project. The SELC is pursuing a separate lawsuit against Spartanburg County, arguing the county improperly issued minor land development permits to bypass public input for what should have been classified as a major development. Oral arguments were heard on September 17, with a ruling still pending.
