Data center push: Potential for special session in Texas for new construction
Opponents of data center expansion in Texas are pushing Governor Greg Abbott to call a special legislative session to address concerns over sales tax exemptions, grid strain, and water usage. Grassroots organizers are demanding a moratorium on new data center construction across the state. Meanwhile, Texas lawmakers are reviewing tax incentives that could cost the state billions in foregone revenue.
The debate surrounding data center expansion in Texas is intensifying, becoming a significant bipartisan issue in the state. Opponents are pressuring Governor Greg Abbott to convene a special legislative session to address concerns, primarily focusing on a substantial sales tax exemption for data centers, strain on the power grid, and heavy water usage.
Grassroots organizers are advocating for a pause in data center expansion, with some explicitly calling for an emergency legislative session or the enactment of a moratorium. Energy research firm Clean View reports 129 data centers currently operating in Texas, with approximately 250 additional projects planned. The primary objections revolve around these facilities' high water consumption, potential increases in electricity bills, and the strain they place on the state's power infrastructure.
Governor Abbott's press secretary, speaking to Sinclair's KEY, stated that the Governor has emphasized that data centers must not negatively impact Texas families. Abbott has directed the Public Utility Commission (PUC) and the Electric Reliability Council of Texas (Ercot) to mandate that data centers cover their own infrastructure costs, provide their own power, reuse their own water, and contribute to lowering residential electric bills.
Concurrently, Texas lawmakers are scrutinizing two existing tax incentives for data centers. They project these incentives could lead to a loss of $3.3 billion in tax revenue for the state during the 2028-2029 budget cycle. Lawmakers suggest it is