Calls continue for pause on new data center projects in Texas

AI industry leaders met in Austin to discuss bringing more data centers to Texas, but not everyone supports the expansion. Central Texas leaders are advocating for a statewide moratorium on new data center projects until specific laws are established to address critical concerns regarding water and electricity consumption. State Representative Vicky Goodwin, running for lieutenant governor, held a news conference with other local leaders, calling for transparency and a pause on approvals, highlighting increased electricity demand, higher power costs, and water usage as primary issues.

Some local communities have already taken action; Hays County leaders voted to pause new data center projects until the end of the year for review, and San Marcos city leaders have banned new data centers across all zoning districts. Calls are growing for state-level protections, with Goodwin proposing a special legislative session to implement regulations that safeguard communities. Lieutenant Governor Dan Patrick has asked the Texas Senate to study data center growth management, balancing economic benefits with impacts on water, infrastructure, and local communities. Governor Greg Abbott also recently called for limiting data center development in rural areas and eliminating existing tax breaks.

The data center industry, however, warns against a moratorium. Dan Diorio, Executive Vice President of the Data Center Coalition, stated that a moratorium sends negative signals to data center companies and other major businesses, potentially discouraging further investment, undermining economic growth, and introducing regulatory uncertainty contrary to Texas's pro-business stance. Despite this, leaders from both political parties are pressing the governor to call a special session to consider regulations, while the governor's press secretary assures that current directives to the PUC and ERCOT will protect Texans.