Gov. Greg Abbott calls for Texas energy regulators to rein in data centers
Texas Governor Greg Abbott has directed the Public Utility Commission of Texas (PUCT) and ERCOT to take steps to prevent data center infrastructure costs from being passed on to electricity customers. He also announced legislative priorities for next year, including requiring data centers to pay for their own electric infrastructure, use water-efficient technologies, and repealing financial incentives. The move comes amid rapid data center development in Texas and concerns over resource consumption.
Texas Governor Greg Abbott has issued a directive to state energy regulators, including the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT), urging them to take immediate action to mitigate the financial burden of data center infrastructure on Texas residents. In a letter sent Wednesday, Governor Abbott instructed the PUCT to ensure data centers lower energy bills when connecting to the grid and to compel these facilities to cover the costs of their electric infrastructure.
The governor has given the agencies until July 17 to submit a memorandum outlining their actions, identifying statutory limitations, and proposing necessary legislation. Additionally, he mandated the PUCT to act by the end of July to reduce residential transmission costs. These directives are a response to the rapid expansion of data centers in Texas, fueled by the growth of artificial intelligence, which has generated bipartisan concern over resource consumption and cost implications for consumers.
Looking ahead to next year's legislative session, Abbott outlined key priorities aimed at reigning in data centers. He plans to codify the PUCT's actions, forcing data centers to pay for their electrical infrastructure and contribute to the state's electric supply. Proposed legislation will also require data centers to implement water-efficient technologies, report their electricity and water usage, and eliminate financial incentives and tax exemptions for these facilities.
The Data Center Coalition, a trade association, expressed its readiness to collaborate with the governor and state regulators on these proposals, asserting that many of the outlined practices are already being implemented by its member companies.