State of Texas: Lawmakers respond to concerns over data center boom, power and water use

The rapid expansion of AI data centers across Texas is prompting lawmakers to address growing concerns from communities regarding their substantial electricity and water consumption. State Representative Erin Zwiener (Democrat) has formed a working group in Hays County to examine these issues, citing Hays County as the nation's second-fastest-growing county and a "tip of the iceberg" for challenges related to transportation, public safety, and critically, water. The group aims to identify existing local tools and propose new policy solutions for the state legislature to ensure smart growth and protect community interests. Meanwhile, State Representative Helen Kerwin (Republican, North Texas) has sent a letter to Governor Abbott, requesting a pause on large-scale data center developments in rural areas due to potential strain on water and electric grids. No response from the governor has been received yet. The Texas legislature previously passed Senate Bill 6, requiring the state's utility commission to develop rules forcing large power users, like data centers, to pay for their connections to the ERCOT grid. One specific project, a $3.5 billion data center expansion by Galaxy in Dickens County, highlights these concerns, with its approval to use 1,600 megawatts of electricity —enough for 320,000 homes. Proposed rules could see these centers paying $100,000 per megawatt for interconnection. While Galaxy states its closed-loop system will minimize water impact, and new tech aims to further conserve water, the overall sentiment among Texans and lawmakers is one of apprehension regarding the pace and scale of development, with calls for more local authority and sustainable resource management.