Texas Lawmakers Question Data Center Developers on Water, Power Use
Texas lawmakers are scrutinizing data center water and power usage, considering new regulations and the potential elimination of state tax exemptions. A House State Affairs Committee hearing in Austin addressed concerns about the industry's impact on state resources and local control. State officials and data center developers testified, with calls for greater transparency and changes to utility cost-allocation programs.
Texas lawmakers on the House State Affairs Committee held a hearing in Austin to address growing concerns over data centers' water and power consumption. State Rep. Charlie Geren (R-Fort Worth) questioned developers about their willingness to remain in Texas if state sales tax exemptions were removed, a move hinted at by Gov. Greg Abbott. The governor has directed state utility regulators to audit data center developers for greater transparency regarding their water and power usage before connecting to the state grid.
The extensive hearing highlighted gaps in available water-use data, with the Texas Water Development Board reporting a low response rate for its water usage survey. Lawmakers also pressed Electric Reliability Council of Texas (ERCOT) CEO Pablo Vegas, Public Utility Commission of Texas (PUC) Chairman Thomas Gleeson, and Office of Public Utility Counsel CEO Ben Barkley on protecting ratepayers amidst surging demand on the state’s power grid. Vegas and Gleeson indicated plans to modify cost-allocation programs for large electricity consumers.
Representatives from several data center companies, including Lancium, Skybox Datacenters, and QTS Data Centers, testified, generally expressing support for "guardrails" such as closed-loop water cooling systems and noise limits. Ryan Kuithe, Senior Vice President of Operations for QTS Data Centers, stated the industry is willing to pay its fair share for infrastructure and consumption. The hearing also touched on local control, with San Marcos City Council Member Amanda Rodriguez urging lawmakers to preserve city zoning authority, citing significant community opposition to proposed projects in her city. Riot Platforms, developing a data center near Rockdale, was also mentioned in the context of ongoing development.