Texas will stop issuing environmental permits for data centers, Gov. Abbott says
Texas Governor Greg Abbott has ordered the Texas Commission on Environmental Quality to halt all new environmental permits for data centers, expanding an existing pause on development. This action comes amidst public criticism and calls for data centers to be more accountable for their impact on the state's power grid and water resources. The move is tied to ongoing audits by ERCOT and TWDB concerning data centers' energy and water usage.
Texas Governor Greg Abbott announced on September 21 that the Texas Commission on Environmental Quality (TCEQ) must cease issuing new environmental permits for data centers. This directive expands an existing temporary pause on data center development across the state, a response to mounting public criticism regarding the industry's rapid growth and its strain on resources.
Abbott's order instructs TCEQ to delay permit approvals until the Electric Reliability Council of Texas (ERCOT), which manages the state's power grid, completes an audit of proposed data center projects. This audit, expected by year-end, will scrutinize tax exemptions, water and electricity consumption plans, measures to minimize community disturbances, and facility ownership. Additionally, the governor previously directed the Texas Water Development Board (TWDB) to collect crucial water usage data from data center companies, with threats of reporting non-compliant entities to local law enforcement.
While ERCOT's audit aims to prevent new data centers from connecting to the state grid, experts note that some developers might circumvent the pause by developing "behind-the-meter" power infrastructure not subject to ERCOT oversight. However, any construction impacting at least one acre still necessitates TCEQ permits, including those for air quality.
The governor emphasized that data centers must "pay their own way, protect our grid and water, and complete the ERCOT and TWDB audits." Environmental advocacy groups, such as Environment Texas, have praised Abbott's order. Executive Director Luke Metzger called for ensuring data centers operate sustainably and efficiently, also criticizing TCEQ's permitting process for alleged loopholes that allow developers to avoid stringent pollution controls. Local concerns are evident in Bastrop County, where residents have sought to overturn stormwater permits for a large data center project due to environmental worries.
Abbott's actions, occurring months before his re-election bid, have drawn criticism from State Rep. Gina Hinojosa, who advocates for legislative action and a moratorium. Abbott has indicated he will collaborate with the legislature next year to end financial incentives for data centers, with ERCOT audit reports expected in early December.