Data Center Developer Withdraws East Texas Project After Failing To Meet Abbott's Standards
Diode Ventures has withdrawn its proposed data center project near Cedar Creek Lake in Henderson County, East Texas. The withdrawal follows Governor Greg Abbott's declaration that the project failed to meet the state's standards for community protection, natural resources, and the electric grid. Diode cited community perspectives and its own "higher standard" for development as reasons for withdrawal.
Diode Ventures has withdrawn its planned data center development near Cedar Creek Lake in Henderson County, East Texas, following Governor Greg Abbott's assertion that the project did not meet the state's new expectations. Governor Abbott stated that data centers operating in Texas must prioritize communities, protect natural resources and the power grid, and respect residents' quality of life, standards he deemed the Diode project failed to meet.
In a letter to Henderson County Judge Wade McKinney and county commissioners, Diode co-presidents Rachel Attebery and Josh Johnson confirmed the decision, citing discussions with state officials, local leaders, and residents. They concluded that the proposed site's proximity to the rural residential community of Cedar Creek Lake was unsuitable, leading them to abandon development at this location. Diode also affirmed its commitment to water-efficient cooling systems and early community engagement in future projects.
This withdrawal comes after Governor Abbott's June 10 directive to the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT), outlining new standards for large-scale data center developments. These standards emphasize community benefits, grid reliability, and environmental stewardship. The governor also announced plans to seek legislation requiring large data centers to report annual electricity and water usage to the PUC and to repeal certain sales tax exemptions and incentives.
The Henderson County project had previously faced local opposition due to concerns about its environmental impact and proximity to residential areas. Governor Abbott's office reiterated the state's commitment to fostering responsible data center growth without compromising Texas communities or natural resources.