Abbott orders action to shield Texans from data center infrastructure costs
Texas Governor Greg Abbott has directed the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) to implement measures to prevent data centers from increasing electricity costs for residents and ensure they do not strain water resources. The directives aim to shift infrastructure costs to data center developers and promote water-efficient technologies.
Texas Governor Greg Abbott has issued directives to the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) to safeguard Texans from the financial burdens associated with the expanding data center industry. Citing concerns over rising electricity costs and water consumption, Governor Abbott instructed the PUC to mandate that data centers cover the full cost of electric infrastructure and contribute to reducing residential electricity bills.
In a letter to PUC Chairman Thomas Gleeson and ERCOT CEO Pablo Vegas, the Governor also called for a review of existing regulatory authority to identify further safeguards for Texans, their property, and state resources. The PUC and ERCOT are required to submit a joint memorandum to the Governor's office by July 17, 2026, detailing actions taken, limitations, and legislative recommendations. Separately, the PUC must take steps by July 31, 2026, to reduce transmission costs for residential ratepayers.
Governor Abbott additionally pledged to collaborate with lawmakers in the upcoming legislative session to enact measures requiring data centers to add electrical capacity, utilize water-efficient technologies, report annual electric and water use, and see the repeal of certain sales tax exemptions. These actions underscore a commitment to ensuring data center expansion benefits the state without negatively impacting residents or natural resources.