Texas Border Business
By Texas Border Business
AUSTIN, Texas — Gov. Greg Abbott on Monday directed the Texas Commission on Environmental Quality to halt permits sought by data centers until state regulators complete audits examining their demands on Texas’ electric grid and water resources.
The directive expands state scrutiny of an industry growing rapidly as artificial intelligence and cloud computing drive construction of large computing facilities across Texas.
“Simply put, Texans must come first,” Abbott said. “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.”
Abbott said the Public Utility Commission of Texas, Electric Reliability Council of Texas and Texas Water Development Board need complete information about proposed projects before regulatory approvals proceed.
The governor previously ordered PUCT and ERCOT to audit data centers moving through ERCOT’s interconnection process. ERCOT was considering more than 474 gigawatts of requests to connect to the grid when Abbott announced the comprehensive audit Aug. 3. About 90% of those requests involved data centers, according to the governor’s office.
Texas’ record peak electricity demand is less than one-fifth of the amount represented by those interconnection requests, according to the governor’s August directive. State officials are examining whether proposed projects could affect grid reliability and infrastructure costs.
Abbott also directed the Texas Water Development Board on Sept. 14 to enforce water-use reporting requirements and coordinate with ERCOT to obtain information about data centers’ water consumption, supply sources and cooling technologies.
Under Abbott’s requirements, data centers must cover electrical infrastructure costs associated with their projects rather than shifting those costs to residential customers. The governor also wants projects to reduce residential electricity costs, disclose electricity and water consumption and avoid using water needed by local communities.
Projects are also expected to address their effects on surrounding communities through measures including setbacks, noise controls and other protections.
TCEQ must now align its permitting decisions with the ongoing ERCOT and water board reviews and use information gathered through those audits.
The governor directed TCEQ to report to his office by Oct. 19 on its compliance with the order.
Abbott also said he plans to work with the Texas Legislature during its next session to eliminate financial incentives for data centers.
The directive represents another step in Texas’ developing regulatory response to the rapid expansion of large-scale data centers and their potential demands on electricity, water, and infrastructure.
Read the Governor’s letter to TCEQ Executive Director Kelly Keel here.
