Texas Orders Halt on Data Center Permits as State Reviews Growing Grid Backlog
Texas Gov. Greg Abbott has directed the state's environmental regulator to halt issuing permits for data center projects until ERCOT completes an audit of grid connection requests. This directive extends a previous moratorium on new data center grid connections, potentially slowing the state's data center expansion. The move comes amid growing grid backlog concerns and increasing public opposition to data center development.
Texas Governor Greg Abbott has issued a new directive, instructing the Texas Commission on Environmental Quality (TCEQ) to cease issuing environmental permits for data center projects. This halt will remain in effect until the Electric Reliability Council of Texas (ERCOT) finalizes an audit of companies awaiting connection to the state's power grid.
This latest action expands upon an August order from Abbott, which initiated an audit of the existing data center connection queue and imposed a moratorium on approvals for new data center grid connections. The governor's decision signals a potential slowdown in Texas's rapid data center expansion, which JLL had projected would make it the world's largest market by the end of the decade. BloombergNEF analysts estimate that the pause could affect nearly 50 gigawatts of proposed data center capacity across the U.S.
The directive also reflects increasing political pressure and public sentiment against data center development, highlighted by a Data Center Watch report on project delays and an NBC News poll indicating widespread voter disapproval of local data center construction. Abbott, who is seeking re-election, has shifted his stance from previously promoting Texas as an "epicenter of AI development" and plans to work with the Legislature to eliminate financial incentives for data centers. TCEQ is expected to report on its compliance by October 19.