Texas Governor Orders Halt on Data Center Permits Pending Power and Water Review
Texas Governor Greg Abbott has ordered the Texas Commission on Environmental Quality (TCEQ) to halt new data center permits. This directive is pending the completion of state audits examining the industry's demands on Texas' electric grid and water resources. Abbott emphasized that data centers must cover their infrastructure costs and protect state resources before approvals proceed.
Texas Governor Greg Abbott has issued a directive ordering the Texas Commission on Environmental Quality (TCEQ) to cease issuing permits for data center projects. This statewide halt will remain in effect until state regulatory bodies complete comprehensive audits assessing the industry's significant demands on Texas' electric grid and water resources. The Governor stated, "Texans must come first," emphasizing that data centers must cover their own infrastructure costs, safeguard the grid and water supply, and complete audits by the Electric Reliability Council of Texas (ERCOT) and the Texas Water Development Board (TWDB).
The directive expands state scrutiny following rapid growth in the data center sector, driven by artificial intelligence and cloud computing. Governor Abbott previously instructed the Public Utility Commission of Texas (PUCT) and ERCOT to audit data centers in ERCOT's interconnection queue, which showed over 474 gigawatts of connection requests, approximately 90% of which were from data centers. State officials are investigating potential impacts on grid reliability and infrastructure costs, as the requested capacity far exceeds Texas' record peak electricity demand.
Additionally, Abbott directed the TWDB to enforce water-use reporting and coordinate with ERCOT to gather data on data centers' water consumption, sources, and cooling technologies. Under the new requirements, data centers must bear associated electrical infrastructure costs, work to reduce residential electricity costs, disclose their consumption, and avoid using water vital to local communities. The governor also called for projects to mitigate community impacts through measures like setbacks and noise controls. TCEQ is mandated to align its permitting decisions with these ongoing reviews and report compliance by October 19. Furthermore, Abbott plans to collaborate with the Texas Legislature to eliminate financial incentives for data centers in the upcoming session.