Data center approvals in Texas halted until audits completed, Abbott says
Texas Gov. Greg Abbott has announced a moratorium on data center approvals, effective until regulatory agencies complete comprehensive audits of facilities seeking connection to the state's electric grid. This decision responds to growing public backlash and concerns about data centers' impact on electricity and water resources. The audit will gather detailed information on tax breaks, power and water usage, community impacts, and ownership to ensure compliance with state requirements.
Texas Governor Greg Abbott has announced a moratorium on the approval of data centers across the state, effective immediately until regulatory agencies complete audits of proposed facilities seeking connection to the state’s electric grid. This directive by Abbott, made amid increasing public backlash over the rapid expansion of data centers, aims to gather more information on these facilities, which state leaders admit they know little about.
The governor has instructed the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to conduct a “comprehensive verification and audit.” This audit will require data center developers to disclose details on tax incentives received, power and water consumption, cooling operations, efforts to minimize community impacts, and facility ownership. Projects failing this audit will be denied grid connection. This directive applies to over 1,800 projects in ERCOT's interconnection queue, with approximately 90% identified as data centers. In response, ERCOT has paused its ongoing “batch zero” review of projects.
Abbott's action follows lawmakers' concerns about data center electricity and water usage, as well as their access to tax incentives. The governor cited the low participation rate in a recent PUCT survey on water and power usage as a key reason for the audit. While the Data Center Coalition, an industry trade group, expressed hope that the review would differentiate responsible developers, critics argue that the directive falls short. Texas Department of Agriculture Commissioner Sid Miller and Environment Texas Executive Director Luke Metzger called for legislative action and a special session to enact stronger regulations, while State Rep. Gina Hinojosa criticized Abbott for accepting donations from data center CEOs.
Local efforts to slow data center development have also been noted, with Hill County previously approving and then rescinding a moratorium after a developer filed a $100 million lawsuit. San Marcos also issued a city-wide moratorium. However, Abbott’s directive only pauses grid connection approvals and does not affect data centers building on-site power generation or those outside the ERCOT region, such as El Paso.