Residents and industry leaders at odds over transmission lines at legislative hearing
A legislative hearing in Texas addressed the contentious issues of 765-kilovolt transmission lines and data center development, facing significant public and industry debate. Governor Greg Abbott has ordered a temporary pause on data center grid connections pending an audit by ERCOT, while lawmakers consider repealing sales tax exemptions for data centers and granting more local control to counties over their buildout.
Texas legislators convened a nine-hour House Committee on State Affairs hearing to tackle the escalating controversy surrounding new 765-kilovolt transmission lines and the rapid expansion of data centers across the state. The hearing saw testimony from residents, landowners, and industry leaders, highlighting a deep divide over energy infrastructure and land use policy.
Following a previous Senate hearing, Lt. Governor Dan Patrick and Senator Charles Schwertner, R-Georgetown, urged the Public Utility Commission to halt the 765 kV transmission project entirely. Concurrently, Governor Greg Abbott announced a temporary pause on approvals for data centers seeking to connect to the state's electric grid, pending an audit by the Electric Reliability Council of Texas (ERCOT). ERCOT CEO Pablo Vegas informed the committee that the audit, expected by December, would require data center developers to provide information on tax breaks, power and water usage, community impact, and ownership, potentially delaying connection for some of the 250 projects in the queue.
Industry representatives, including Oncor, AEP, and CPS Energy, expressed concerns about potential delays to transmission line construction, citing ramifications such as disrupted schedules and increased equipment costs due to high national demand. Walt Baum, president of Powering Texans, and Katie Coleman, representing the Texas Association of Manufacturers, argued that halting these projects would negatively impact not just data centers but also oil and gas operations and other industrial growth, asserting that the transmission needs are broader than just data centers.
Legislators also discussed future regulatory measures for the data center industry in the 2027 session. County officials, including Leon County Commissioner Kyle Workman, advocated for increased local authority to manage data center development in unincorporated areas, where counties currently lack zoning powers. Furthermore, the committee appeared committed to repealing the state's sales tax exemption for data centers, which is projected to cost the state $1.3 billion in uncollected taxes by 2026. State Representatives Charlie Geren, R-Fort Worth, and Rafael Anchía, D-Dallas, both expressed support for addressing this issue, with Anchía calling for a special legislative session.