Gov. Greg Abbott takes aim at Texas data centers
Governor Greg Abbott has issued directives to Texas's electric regulators, ERCOT and the Public Utility Commission, demanding new rules for data centers. These directives aim to require data centers to pay for all necessary electric infrastructure and reduce residential electric bills. Abbott also plans to seek new legislation next year to mandate water-efficient technologies, usage reporting, and repeal a sales tax exemption for data centers.
Texas Governor Greg Abbott has issued significant directives to the state's top electric regulators, the Public Utility Commission (PUC) and ERCOT, aiming to impose new regulations on the rapidly growing data center industry. Abbott demanded that new rules require data centers to fully fund the electric infrastructure necessary for their operations and ensure that their presence leads to reduced residential electricity costs for Texans. He also stressed the importance of data centers not depleting local water resources.
The Governor's actions are a direct response to concerns that the proliferation of power-hungry data centers is contributing to rising consumer electric bills and straining the state's power grid. State estimates project that data center growth could quadruple Texas's power consumption by 2032. Counties like Ellis, Johnson, and Dallas are identified as top destinations for new data center projects based on power capacity requests, with DataBank constructing a new campus in Red Oak.
Looking ahead to the next legislative session, Abbott indicated he would pursue new laws to mandate water-efficient technologies and require data centers to report their electricity and water usage. He also called for the repeal of a data center sales tax exemption, which the Texas Tribune estimates could cost the state billions. The Data Center Coalition, represented by Dan Diorio, Vice President of State Policy, stated its willingness to cooperate with the Governor's office and regulators, noting that some members, including Amazon, Google, and Microsoft, already cover their electric infrastructure costs. However, Diorio expressed reservations about prescriptive water-efficiency requirements, advocating for local decision-making.