Gov. Abbott Orders Halt to Texas Data Center Permits Pending State Audits
Governor Greg Abbott has directed the Texas Commission on Environmental Quality to halt permits for data centers statewide. This pause will remain until the Electric Reliability Council of Texas and Texas Water Development Board complete audits on data center projects' electricity and water impacts. Abbott also plans to work with the Legislature to eliminate financial incentives for data centers.
Texas Governor Greg Abbott has issued a directive ordering the Texas Commission on Environmental Quality (TCEQ) to cease processing permit applications for data centers. This halt is mandated until the Electric Reliability Council of Texas (ERCOT) and the Texas Water Development Board (TWDB) conclude audits of data center projects that are seeking interconnection to the state's power grid.
The Governor's directive, announced on a Monday, stipulates that no state agencies should proceed with regulatory approvals for data center development until audit results are available. Governor Abbott emphasized that "Texans must come first," stating that data centers need to cover their own costs, safeguard the grid and water, and complete the required audits. He specified that TCEQ would not issue permits until these conditions are met.
This action follows previous orders from Governor Abbott, including an August 3rd directive for the Public Utility Commission of Texas (PUCT) and ERCOT to audit data centers' electricity demand, power generation plans, water consumption, financial assistance, and community impacts. A September 14th order also instructed the TWDB to enforce water-use reporting for major users, including data centers, and collaborate with ERCOT on water use data. The collective aim of these agencies is to assess the impact of data center development on grid reliability and Texas's water resources.
Furthermore, Governor Abbott has directed data centers to cover their electrical infrastructure costs, avoid using water essential for local communities, report their electricity and water usage, and adhere to setback requirements to minimize community impacts. TCEQ is now required to integrate information from the ERCOT and TWDB audits into its permitting decisions and must provide an update on its compliance by October 19th. Governor Abbott also signaled his intent to collaborate with the Texas Legislature in its next session to eliminate financial incentives for data centers.