Abbott pauses data center permits pending water and power review
Texas Governor Greg Abbott has directed the TCEQ to halt all data center permits until ERCOT and TWDB complete audits on their impact on the electric grid and water resources. Data centers must cover their own infrastructure costs, protect the grid and water, and comply with reporting before permits will resume. Abbott also plans to eliminate financial incentives for data centers.
Texas Governor Greg Abbott has issued a directive to the Texas Commission on Environmental Quality (TCEQ), mandating a halt on all data center permits. This pause will remain in effect until the Electric Reliability Council of Texas (ERCOT) and the Texas Water Development Board (TWDB) complete comprehensive audits of the data center industry's impact on the state's electric grid and water resources.
In a letter dated September 21 to TCEQ Executive Director Kelly Keel, Governor Abbott emphasized that no state agency should proceed with regulatory approvals for data center development until the findings from these audits are available to the Public Utility Commission of Texas (PUC), ERCOT, and TWDB. The directive underscores that data centers must cover their own electrical infrastructure costs, contribute to lower residential electricity bills, and fulfill the audit requirements.
Furthermore, data centers are now required to avoid using water essential for local communities, report their electricity and water consumption, and adhere to setback requirements designed to protect surrounding areas. The TCEQ is tasked with aligning its permitting decisions with these directives and is expected to provide an update to the Governor's Office by October 19, 2026. Governor Abbott also indicated his intention to collaborate with the Legislature in the upcoming session to eliminate financial incentives for data centers.