Texas Data Centers Face Scrutiny Over Water, Power and Tax Breaks
Data centers in Texas are facing increased scrutiny over their impact on water and power resources, as well as the cost of state tax exemptions. Environmental advocates are calling for a temporary moratorium on new projects, while the Texas Senate Finance Committee reviews the growing cost of tax breaks for data centers.
The Alliance for a Clean Texas initiated a "Data Center Week of Action" at the state capitol, urging Governor Greg Abbott to convene a special legislative session or implement a temporary moratorium on new data center developments. Environmental advocates, including Commissioner Sid Miller, expressed concerns that the rapid expansion of data centers is straining Texas's water supply, electric grid, and natural resources.
Simultaneously, the Texas Senate Finance Committee is scrutinizing the state's data center tax exemption program. Committee members noted that the cost of these exemptions has dramatically increased from $14.6 million in 2014 to a projected $3.3 billion by 2028. Senate Finance Committee Chair Joan Huffman indicated her intention to file legislation in the next session to re-evaluate whether these exemptions still provide a justifiable return on investment.
In response, Governor Abbott's office issued a statement asserting that data centers must not negatively impact Texas families. The statement highlighted existing directives to the Public Utility Commission (PUC) and ERCOT, requiring data centers to fund their own infrastructure, generate their own power, reuse water, and contribute to lower residential electric bills, thereby safeguarding Texans from higher costs.