Texas governor’s data center moratorium prompts calls for special legislative session

Texas Governor Greg Abbott has implemented a moratorium on new data centers connecting to the state's power grid, contingent on an audit of these facilities. This decision has ignited debate, with several political figures and advocacy groups, including Austin state Rep. Gina Hinojosa and Texas Agriculture Commissioner Sid Miller, criticizing the governor's move as insufficient and urging a special legislative session to establish more robust protections and regulations for Texans.

The state is experiencing the fastest growth in the data center market nationwide, with these facilities accounting for roughly 90% of requests for 474 gigawatts of power from the Texas grid. Critics argue that Abbott's directive, while a step, lacks the legislative teeth necessary to effectively manage data centers' impact on the power grid, local communities, and tax incentives. Public Citizen, an advocacy group, also emphasized the limitations of the governor's powers without legislative action, highlighting the delay until the next regular session in 2027.

Abbott's office, through campaign press secretary Eduardo Leal, stated that the directive has already prompted major data center companies like Amazon, Google, and Microsoft to adopt standards protecting communities and the power grid. However, energy consultants and political scientists, such as Beth Garza and Mark Jones, question the enforceability of the directive without new state laws and suggest that the move might also be politically motivated to energize rural voters, who show high opposition to data centers.

Looking ahead, Governor Abbott has committed to prioritizing data center regulation in the 2027 legislative session, aiming to eliminate tax breaks, curb water and energy consumption, and shield Texans from grid connection costs. This anticipates a significant legislative pushback from data center lobbyists.