Governor Greg Abbott has announced a pause on approving new data centers in Texas while state agencies review their impact on the electric grid and local communities. The Public Utility Commission of Texas and the Electric Reliability Council of Texas are now required to conduct audits of data center developers before they can connect to the state’s power grid. Developers must now provide details on tax incentives, water use, electricity demand, and community impact as part of the audit process.
The move comes as the state’s electric grid faces a surge in demand from new data center projects. ERCOT is currently reviewing over 1,800 projects in its queue, with about 90% of them being data centers. These projects would collectively require more than 474 gigawatts of electricity, which is over five times the grid’s peak demand record.
Abbott emphasized that protecting Texans’ safety and quality of life is the top priority in his statement. Projects that do not meet state requirements will be denied access to the electric grid. The directive applies to all projects currently in ERCOT’s interconnection queue.
Although the state does not maintain a central database of data centers, at least 335 are known to be operating in Texas. Texas has become the second-largest market for data centers in the country, with plans to take the lead from Virginia. Some data centers are building their own power generation systems to avoid connecting to the grid.
Not all of Texas is covered by ERCOT, including areas like El Paso where large data centers have been built. The Data Center Coalition supports the audit process and hopes it will separate responsible developers from those who are not. Lawmakers have been seeking more transparency about how data centers use electricity and water resources.
A survey developed by the Public Utility Commission and the Texas Water Development Board collects information on cooling systems, water sources, and electricity demand. During a June hearing, a state representative criticized the low level of survey participation by developers. Abbott also directed agencies to ensure data centers cover infrastructure costs and reduce electricity prices for residents.
The new audit process could disrupt ERCOT’s ongoing changes to how large energy projects are reviewed. ERCOT is currently reviewing Abbott’s order and has paused the batch zero study. Local governments have also tried to slow data center development, but many efforts were blocked by state law.
Hood County rejected two countywide moratorium attempts, while Hill County passed one before reversing it after a lawsuit. Other states have also placed holds on large data center projects. Critics argue that Abbott’s directive does not go far enough to stop the expansion of these facilities.
Texas Agriculture Commissioner Sid Miller said the order lacks real force without legislative action. Miller and others are calling for a special legislative session. Environmental advocates say data centers should not come at the cost of natural resources or community health.
State Representative Gina Hinojosa, a Democratic candidate for governor, said the pause is not enough. She criticized the governor for not taking stronger steps to address concerns about data center growth. Opponents of data centers have noted that many communities feel blindsided by these large projects.
Environmental groups have documented over 1,300 complaints from residents near data centers. In Sulphur Springs, more than 400 complaints were submitted about a major data center project. The governor’s directive has led to calls for a special legislative session to regulate the industry.
Opponents of the directive say it does not go far enough to address data center impacts. State Rep. Gina Hinojosa said the pause could last only a day and is not meaningful. Sid Miller, a Republican, criticized the directive as lacking real power without new laws.
Public Citizen also urged lawmakers to meet before the next regular session in 2027. Energy experts questioned whether the governor can enforce his new rules without new state legislation. The directive has disrupted ERCOT’s new process for reviewing large energy consumers.
Political scientists suggest the governor may be trying to boost Republican voter turnout by addressing rural concerns. A recent poll found that more than half of Texas residents oppose data centers in their communities. Abbott has promised to make data centers a focus during the 2027 legislative session.
He plans to work with lawmakers to end tax breaks, control water use, and protect residents from infrastructure costs. Political scientists expect strong opposition from data center lobbyists in the upcoming session.
IMAGE: Gregory Abbott speaking at FreePac, hosted by FreedomWorks, in Phoenix, Arizona.. Photo: Gage Skidmore / Wikimedia, taken 2012-10-13, CC BY-SA 3.0