Texas Governor Proposes New Data Center Restrictions, Impacts Bowie County Projects
Texas Governor Greg Abbott has reversed his stance on data center development, proposing new restrictions on their construction in rural areas and advocating for the elimination of tax breaks. This policy shift impacts two major data center projects planned for Bowie County, Texas, both of which are already facing local opposition regarding water usage, electricity costs, and environmental concerns. State agencies are under tight deadlines to implement some of these directives, while proposed legislative changes will be considered in the next session.
Governor Greg Abbott, after a decade of actively promoting data center growth in Texas, is now proposing significant restrictions on the industry's development. During a campaign stop, Abbott advocated for prohibiting AI data centers in rural neighborhoods, requiring them to source their own power and water, implement water reuse technologies, and contribute to lower electricity costs for residents. He also reiterated his call to repeal state tax incentives for data centers.
These public statements follow a formal directive issued by Abbott on June 10 to the Public Utility Commission of Texas (PUC) and ERCOT, instructing them to mandate that data centers cover all their electric infrastructure costs and to review existing authorities to protect Texans' resources. The PUC and ERCOT face a July 17 deadline to submit a joint memorandum detailing actions and necessary legislation, with the PUC also mandated to reduce residential ratepayer transmission costs by July 31, 2026. Abbott also pledged to push for legislation in the next session that would require new data centers to use water-efficient cooling, report annual electricity and water usage to the PUC, implement setbacks and noise-reduction technology, and repeal sales tax exemptions.
This policy reversal directly affects Bowie County, where two substantial data center projects are underway. TexAmericas Center announced "Project Big Pine," a 500-acre campus designed to attract data centers, which has already drawn organized opposition from local residents concerned about water use, electricity costs, and pollution. Separately, Black Mountain Power LLC acquired nearly 600 acres in western Bowie County and applied to build a gas-fired power plant, sparking yard-sign opposition in the rural Redlick and Leary areas. While Bowie County's grid operates under the Southwest Power Pool (SPP) rather than ERCOT, Abbott's proposed statewide legislation on water, setbacks, usage reporting, and tax incentives would still apply to these projects.