Abbott Orders Data Centers to Cover Their Own Power Costs, Protecting Texas Ratepayers
Governor Greg Abbott has directed the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) to implement measures to ensure data centers cover their own electricity infrastructure costs and reduce water usage. This directive aims to protect residential ratepayers from rising costs. Abbott also plans to work with the Legislature to codify these protections into law.
Governor Greg Abbott of Texas has issued a directive to the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT), instructing them to implement immediate measures to shield residential electricity customers from the financial burden of data center expansion. The Governor emphasized that data centers must operate in a manner that reduces costs for residents, conserves water critical for communities, and respects neighborhood needs.
In a formal letter to PUC Chairman Thomas Gleeson and ERCOT CEO Pablo Vegas, Governor Abbott outlined the required actions. Additionally, he committed to collaborating with the Texas Legislature during the next session to codify these protections into state law. This legislative effort aims to ensure that data centers contribute positively to Texas’ electric capacity rather than solely increasing demand.
Future legislation will include mandating water-efficient cooling systems for data centers, requiring accurate reporting of electricity and water usage for state planning purposes, phasing out outdated tax incentives, and adopting community safeguards such as setbacks and noise reduction protocols.