Abbott: Rapid scale of data center development in Texas requires oversight
Governor Greg Abbott has directed the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) to ensure data center expansion does not burden Texans with infrastructure costs or negatively impact residential electric bills. He also pledged to work with the legislature to codify these requirements, mandate water-efficient technologies, and repeal sales tax exemptions for data centers. The goal is to ensure economic growth benefits Texans without undue burdens on communities.
Texas Governor Greg Abbott has issued directives to the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) to address the rapid growth of data center development in the state. Governor Abbott emphasized the need for oversight to prevent data center expansion from burdening Texans with infrastructure costs or negatively impacting residential electric bills.
His directives include requiring the PUC to ensure data center interconnections reduce residential electrical bills and mandate that data centers cover all their electric infrastructure costs. The PUC and ERCOT are also tasked with reviewing existing authorities to safeguard Texans and their resources, with a joint memorandum summarizing actions and legislative recommendations due by July 17, 2026. The PUC is further directed to initiate action to reduce residential ratepayer transmission costs by July 31, 2026.
Additionally, Governor Abbott pledged to work with the legislature in the next session to codify these PUC actions, ensure data centers add to Texas's electric capacity, require new data centers to use water-efficient technologies like closed-loop cooling systems, and mandate annual reporting of electricity and water usage to the PUC. He also proposed repealing sales tax exemptions and other incentives for data centers, and requiring them to implement best practices such as setbacks and noise-reduction technology to minimize community impacts. These actions aim to ensure innovation and investment in Texas strengthen residents' quality of life without placing undue burdens on them.