Gov. Greg Abbott calls for Texas energy regulators to rein in data centers
Texas Governor Greg Abbott has directed state energy regulators to implement measures preventing data center infrastructure costs from burdening residents and ensuring data centers cover their own electric infrastructure expenses. The directive, issued to the Public Utility Commission of Texas and ERCOT, also requires a review of their authority to safeguard Texans amid the state's rapid data center expansion. These actions are part of a broader effort to address concerns over data center resource consumption and rising energy bills.
Texas Governor Greg Abbott issued a directive to state energy regulators, including the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT), demanding action to ensure data centers pay for their electric infrastructure and do not pass associated costs onto residents. In a letter sent Wednesday, Governor Abbott emphasized the need for oversight to prevent residential electric bills from being negatively affected by the rapid scale of data center development. He also instructed the agencies to review their existing authorities and identify legislative needs to protect Texans, their property, and resources, with a memorandum outlining these steps due by July 17. The PUCT must also act by the end of July to reduce residential transmission costs.
This directive comes as Texas is poised to become the world's largest data center market, a development that has sparked bipartisan concern across the state regarding resource consumption and energy costs. The Governor further outlined his legislative priorities for the upcoming year, which include codifying PUCT's actions to make data centers financially responsible for their electric infrastructure, requiring them to contribute to the state's electric supply, and mandating the use of water-efficient technologies and usage reporting. Additionally, he seeks to repeal financial incentives and tax exemptions for these facilities and reduce their impact on local communities. The Data Center Coalition stated its commitment to working with state leadership, noting that member companies already employ many of the practices outlined by the Governor. University of Texas Research Scientist Joshua Rhodes and University of Houston Energy Fellow Ed Hirs anticipate significant legislative focus on data centers in the next session, addressing issues such as siting, noise levels, and water and energy use. A previous attempt by Hood County commissioners to pass a data center moratorium was rejected, as noted by State Senator Paul Bettencourt.