Gov. Abbott directs PUC, ERCOT on data centers
Texas Governor Greg Abbott has issued a directive to the state's energy regulators, the Public Utility Commission and ERCOT, to ensure data centers contribute to lower electricity costs for residents and conserve water resources. The directive aims to address the rapid growth of data centers and their impact on the state's power grid and water supply. Critics question the effectiveness of these measures, while local officials seek more authority for communities to regulate data center development.
Texas Governor Greg Abbott has issued a directive to the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT), urging them to ensure data center operations lead to reduced residential electric bills and full payment for their electric infrastructure. The governor also instructed both agencies to identify measures to protect Texans and their resources, specifically calling for water-efficient cooling systems, accurate usage reporting, phasing out outdated tax incentives, and adopting community protection practices like setbacks and noise reduction.
Ed Hirs, an energy economics fellow at the University of Houston, expressed skepticism that the governor's approach, which seems to push data centers towards bringing their own power generation, would fully shield residential customers from higher costs. He noted that even with their own generators, data centers would still require significant backup connections to the ERCOT grid, necessitating infrastructure scaling. Bloom Energy projects a 142% increase in electricity demand from data centers in Texas.
Gina Hinojosa, Governor Abbott's Democratic challenger, criticized the directive as a "CYA move," arguing that Abbott's policies, including generous tax incentives, are responsible for the unchecked growth of data centers in Texas. Meanwhile, Hays County Judge Ruben Becerra is advocating for a special legislative session to grant local governments more authority over data center development within their communities.
Environmental groups, including Environment Texas, welcomed parts of the governor's proposal, particularly the calls for greater water efficiency and the elimination of subsidies. However, Luke Metzger, executive director of Environment Texas, also urged lawmakers to address air pollution concerns associated with the industry's reliance on diesel backup generators and its demand for new gas-fired power plants.