Gov. Greg Abbott calls for data center penalties if not complying with state water laws
Governor Greg Abbott issued a new directive calling for the Texas Water Development Board to penalize data centers that fail to comply with state water laws and reporting requirements. This action follows previous directives to temporarily halt new data center connections to the power grid and repeal sales tax exemptions, in response to growing public opposition. Abbott emphasized that data centers must not take water or power needed by communities and must work to lower electricity costs for consumers.
Texas Governor Greg Abbott has issued another directive concerning data centers, instructing the Texas Water Development Board to penalize facilities that do not comply with state water laws, particularly regarding water use reporting. This marks at least the third such directive from the Governor in recent months, signaling a significant shift in his stance on data center development.
Previously, Governor Abbott had promoted Texas as an "epicenter of A-I development." However, growing public frustration over data centers in the state, highlighted by residents like Donna Howard of Matagorda County and Manvel Mayor Dan Davis, led to a change in approach. In June, Abbott announced plans to repeal "unnecessary" incentives, including sales tax exemptions, and by August 3rd, he halted new data center connections to the power grid until state regulators completed an audit and companies complied with new standards. Two weeks later, approximately 20 companies reportedly agreed to these terms.
The Governor's latest directive specifically targets water usage. He outlined four standards for data centers: identifying water demand without impacting community needs, not depleting the Texas power grid, lowering electricity costs for consumers, and not disturbing neighborhoods or rural communities. Abbott stated these standards are now universally applied to all data centers in Texas. He attributed the public backlash to data centers for their rapid, uncoordinated construction without sufficient collaboration with state and local governments.