Abbott tells regulators data centers must pay—or Texans will not
Texas Governor Greg Abbott has directed the Public Utility Commission of Texas (PUC) and ERCOT to implement measures ensuring data centers bear their own infrastructure costs to prevent residential customers from facing increased power bills. The directives also aim to reduce the industry's impact on water supplies and local communities. Abbott plans to pursue legislation requiring water-efficient cooling, consumption reporting, and contributions to grid capacity, in addition to repealing certain tax incentives.
Texas Governor Greg Abbott has issued directives to state regulators, the Public Utility Commission of Texas (PUC) and ERCOT, to ensure that the rapidly expanding data center industry covers its own infrastructure costs, preventing financial burdens on residential electricity customers. The Governor expressed concerns over the industry's strain on the state's power grid and natural resources.
In a letter to PUC Chairman Thomas Gleeson and ERCOT CEO Pablo Vegas, Abbott called for increased oversight, stating that data centers must reduce costs for residential customers, conserve water resources, and consider community needs. He instructed the PUC to ensure data center interconnections lead to reduced residential electricity costs and require data centers to pay all associated electric infrastructure costs. ERCOT and the PUC were also ordered to review additional actions to safeguard Texans and their resources.
Looking ahead, Governor Abbott pledged to pursue new legislation in the next session, which would mandate water-efficient cooling systems for new data centers, require annual reporting of electricity and water consumption, and ensure facilities contribute to generating capacity. He also called for the repeal of certain tax incentives for data centers and proposed measures like setbacks and noise-reduction technology to mitigate community impacts. The PUC and ERCOT are tasked with submitting a joint memorandum outlining their actions and legislative recommendations to the Governor's office by July 17.