Gov. Abbott directs ratepayer protections from data center infrastructure costs
Governor Greg Abbott of Texas has issued recommendations to the legislature and directives to the Public Utility Commission of Texas (PUC) and ERCOT regarding data center operations. These actions aim to protect Texans from bearing the costs of power and water consumed by data centers, emphasizing that data centers should fully fund electric infrastructure and minimize community water drain.
Texas Governor Greg Abbott has addressed the growing power demands stemming from artificial intelligence and data center expansion, issuing a set of recommendations for the 2027 legislative session and directives to state regulatory bodies. Governor Abbott stated his intent to safeguard Texans from incurring costs associated with electricity and water consumption by data centers.
In a letter to Public Utility Commission of Texas (PUC) Chairman Thomas Gleeson and ERCOT CEO Pablo Vegas, the Governor mandated that the PUC require data centers to fully fund the costs of electric infrastructure. He also directed the PUC and ERCOT to identify additional measures under their authority to protect residential and small business ratepayers. A specific action item includes the PUC initiating steps to reduce residential ratepayers' transmission costs by July 31st.
The Governor emphasized, "Data centers must operate in ways that reduce costs for residential electricity customers, do not drain water needed for our communities, and take into consideration the needs of our neighborhoods." According to the Texas Tribune, the Data Center Coalition has welcomed the Governor's proposals, indicating that the industry already adheres to many of the recommended practices.