Texas to pause new data center projects until audit is conducted, Gov. Abbott says
Governor Greg Abbott has directed a statewide pause on new data center project approvals in Texas until state regulators conduct a comprehensive audit. This action addresses growing public and political concerns regarding the impact of data centers on the electric grid and water supplies. The Public Utility Commission of Texas (PUC) and Electric Reliability Council of Texas (ERCOT) are tasked with the audit, which will evaluate all projects seeking grid connection.
Texas Governor Greg Abbott has announced an immediate halt to the approval of all new data center projects across the state until a comprehensive audit is completed by state regulators. The directive tasks the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) with verifying and auditing all data center applicants before any further approvals are granted to connect to the power grid.
This decision comes amid increasing public and political scrutiny over the rapid expansion of the data center industry in Texas, particularly concerning its significant impact on the state's electric grid reliability and local water supplies. Governor Abbott stated that any project failing to comply with the audit process to protect grid reliability and resilience must be denied, emphasizing that "Texans must come first." Officials have not specified the duration of this pause or when the audits will commence.
The Data Center Coalition, an industry advocacy group, expressed hope that the audit would distinguish responsible developers from others without causing unnecessary delays to projects that bring investment and jobs. ERCOT confirmed it would postpone its new batch study process for large projects, including data centers, in response to the governor's order. This pause follows previous concerns raised by Abbott regarding shielding residential customers from data center development costs and a lack of transparency from data center companies regarding their water and power usage in previous state surveys. State Rep. Gina Hinojosa, an Austin Democrat, urged Governor Abbott to enact a more definitive moratorium, highlighting bipartisan concerns about data center growth and calls for a special legislative session to address oversight and tax exemptions.