Abbott letter directs energy regulators to protect Texans from data center costs
Gov. Greg Abbott directed Texas energy regulators to protect residential electricity customers from costs linked to rapid data center growth, emphasizing that data centers must fully fund their infrastructure and reduce transmission costs. He also outlined plans to work with the Texas Legislature to codify these actions, ensure data centers add to electric capacity, and adopt water-efficient cooling systems and annual reporting requirements.
Governor Greg Abbott has directed Texas energy regulators, the Public Utility Commission (PUC) and the Electric Reliability Council of Texas (ERCOT), to implement measures protecting residential electricity customers from rising costs associated with the state's rapid data center growth. In a letter to PUC Chairman Thomas Gleeson and ERCOT CEO Pablo Vegas, Abbott emphasized that data centers must reduce costs for residents, conserve water, and consider community needs.
Specifically, Abbott instructed the PUC to mandate that data centers fully fund their electric infrastructure costs and take action to lower residential ratepayers' transmission costs by July 31. Both PUC and ERCOT are required to submit a joint memorandum to the Governor's Office by July 17, detailing additional steps to safeguard residential and small business ratepayers.
Looking ahead, Governor Abbott pledged to collaborate with the Texas Legislature during its next session to codify these PUC actions, ensuring data centers contribute to the state's electric capacity rather than solely increasing demand. He also plans to work with lawmakers to enforce water-efficient cooling systems, require annual reporting of electricity and water usage, eliminate outdated tax incentives, and implement practices to protect neighboring communities from issues like setbacks and noise.
State Representative Cody Harris (R-Palestine) publicly supported the Governor's "pro-active approach," noting the House Natural Resources Committee's upcoming June 23 hearing to investigate data center water usage and potential protective policies.