Abbott recommends data center regulations
Texas Governor Greg Abbott has directed state regulators to implement new protections regarding the rapid expansion of data centers, focusing on residential ratepayers, water resources, and rural communities. He plans to work with lawmakers to codify these measures, including requirements for water-efficient cooling and restrictions on data center locations. Local communities have expressed strong opposition, leading to some moratoriums and a city-wide ban.
Texas Gov. Greg Abbott has instructed state regulators to implement new protections regarding the rapid expansion of data centers across the state. He directed the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) to ensure data center growth does not burden residential ratepayers, drain water resources, or negatively impact rural communities.
Governor Abbott's directives include requiring data centers to fully fund their necessary electric infrastructure, preventing cost shifts to residents. He also mandated that PUC and ERCOT identify further protections for residential and small business ratepayers, with recommendations due by July 17 and actions to reduce transmission costs by July 31. Abbott intends to collaborate with lawmakers in the next session to codify these measures, such as mandating water-efficient cooling, enhanced reporting of utility use, eliminating outdated tax incentives, and implementing noise reduction and setback requirements.
The Governor explicitly called for restrictions on new AI data centers in rural Texas neighborhoods, emphasizing that developers must bring their own funding, power, and water recycling solutions, while also contributing to lower electricity costs for residents. These concerns were echoed at the Texas Farm Bureau's Summer Conference, where State Rep. Ken King and ERCOT chair Bill Flores discussed the challenges of massive electricity demand, water use, and land conversion. King highlighted a dramatic increase in proposed power demand, from an anticipated 10 gigawatts to over 400 gigawatts.
The article notes that while data centers are attracted to rural Texas for available land and fewer development restrictions, public polling indicates strong opposition among Texans, particularly in rural areas. Several counties have considered moratoriums, with Hill County reversing its decision due to a $100 million lawsuit from a developer. The city of San Marcos has taken an even stronger stance, becoming the first to outright ban data centers. The Texas Farm Bureau has also submitted a letter to Lt. Gov. Dan Patrick and House Speaker Dustin Burrows, advocating for a balanced approach and state oversight.