Abbott’s data center construction pause will take ‘several months’ for up to 300 projects in Texas

Texas Governor Greg Abbott has imposed a moratorium on new data center development in the state, ordering an audit of up to 300 proposed projects. The governor's directive, issued earlier this month, aims to introduce stricter standards for data center developers, particularly concerning their energy and water consumption and reliance on state resources. This pause will affect "Batch Zero" projects, which are those that have already secured financing and land for construction.

The Electric Reliability Council of Texas (ERCOT), the state's energy grid regulator, will lead the audit process. ERCOT Senior Vice President Chad Seely indicated that regulators are targeting to complete the study of the first batch of projects by April 2027, a process expected to take "several months." The audit will involve sending information requests to large energy consumers to verify eligibility and collect "community impact information," including details on water technology and power deliverability.

Governor Abbott emphasized that future data centers in Texas must be self-sufficient, stating, "Any AI data center even thinking about coming here, they got to bring their own money, bring their own power, reuse their own water, and do it in a way that reduces the cost of electricity for residents across our state." He also called for the elimination of tax breaks for these facilities, asserting they must be responsible for funding their own projects. These new policies are already seeing widespread adoption among data center builders.