By Paul Cobler, The Texas Tribune
Gov. Greg Abbott ordered the Texas Commission on Environmental Quality on Monday to stop issuing new permits for data centers, strengthening his moratorium on the industry’s development in Texas.
The move comes as rapid data center development statewide angers Texas communities ahead of Abbott’s November reelection bid.
Abbott sent a letter to TCEQ Executive Director Kelly Keel directing the agency to halt all permits to data centers until the Electric Reliability Council of Texas, the state’s nonprofit electric grid operator, and the Texas Water Development Board complete an audit of data centers seeking to be built in the state. The audit seeks information about planned data centers’ electricity use, water use, impact on local communities, ownership information and use of tax breaks.
“Simply put, Texans must come first,” Abbott wrote. “Data centers must pay their own way, protect our grid and water and complete the ERCOT and TWDB audits. Until they do, TCEQ will issue no permits sought by data center projects.”
TCEQ will need to consider the information collected in the audit when it approves future permit applications, necessitating the pause on approvals, Abbott wrote.
The new pause continues Abbott’s reversal on the rapid development of data centers in Texas, which he said in November he wants to become an “epicenter of AI development.”
In June, Abbott first ordered ERCOT and the Public Utility Commission of Texas to require data centers to fully fund the costs of electric infrastructure needed to serve them and to take other measures to reduce electricity costs to residents. On July 17, PUCT Chair Thomas Gleeson responded with a letter outlining agency efforts and calling on the Legislature to grant more authority to regulate the industry.
Abbott then announced a moratorium on new data centers connecting to the state’s electric grid, ordering ERCOT on Aug. 3 to ensure data center developers provide information on tax breaks, power use and generation, water use and cooling operations, efforts to reduce effects on local communities and ownership of the facility. Projects that fail the ordered verification and audit should be denied grid connection, the governor said.
Abbott’s latest order appears to address concerns that data center developers who build “behind the meter,” or create their own power generation source to bypass electric-grid approval, would not be delayed by the ERCOT audit. The ERCOT region also does not encompass the entire state, although the PUC and TWDB jurisdiction does.
After as few as 28% of data centers responded to a state-mandated water-usage survey, Abbott directed the TWDB to penalize data centers that do not report their water usage. He instructed the TWDB to partner with the PUC and ERCOT in their audit of facilities.
“Because the information sought by the PUC, ERCOT, and TWDB is necessary to make informed decisions by each of those agencies, no other state agency shall move forward with regulatory approvals related to data centers until this information is acquired,” Abbott wrote. “This action is consistent with my whole-of-government approach to ensure Texans’ natural resources and way of life are protected.”
This article first appeared in The Texas Tribune. It is republished under a Creative Commons license.
