Gov. Greg Abbott (R-TX) on Monday placed a moratorium on new data center development in Texas, sparking a variety of reactions in the Lone Star state.
Abbott said he was halting approvals for new data center projects until the state’s Public Utility Commission and Electric Reliability Council complete an audit on all data centers wanting to connect to the state’s power grid. ERCOT is considering approximately 474 gigawatts of requests to connect to the Texas grid, more than five times the state’s record peak electricity demand for ERCOT, Abbott wrote in a letter to the regulators, adding that around 90% of the new power requests are from data centers.
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Abbott said any project that fails to comply with the requirements set forth by the PUCT and ERCOT will be denied connection to the grid, warning that “unprecedented load growth could endanger the reliability and stability of the Texas electric grid.” He said regulators will scrutinize developers for whether they are providing their own power or depending on the ERCOT grid, bringing their own water or reusing their own water — as opposed to using community resources — and looking at the extent to which data centers are paying their own way or depending on the state for financial assistance, including through state and local tax incentives.
The audit is significant as Texas is one of the fastest-growing states in the country for data centers, which are essential for powering the technology grid and artificial intelligence. Proposals for them in certain Texas communities have raised increasing debate over whether local authorities or the state holds the power to decide where data centers should be.
Reactions to Abbott’s latest order on data centers are mixed.
The Data Center Coalition, a key industry group that represents Microsoft, Meta, Google, and other power players, expressed tentative optimism after the announcement.
“The Data Center Coalition and its members strive to be good actors where we operate, which is why we are hopeful this directive from the governor will help separate those who are responsible water and energy stewards from those who are not,” said Dan Diorio, the coalition’s vice president of state policy. “With billions of dollars in investment and hundreds of thousands of jobs on the line, we urge the PUCT and ERCOT to move swiftly in order to distinguish between speculative projects and serious, committed investors and community partners.”
The Texas chapter of Public Citizen, a nonprofit consumer rights advocacy group, slammed the governor’s declaration as a “faux pause” and “so vague that it should be considered meaningless.”
“It only applies to data center projects seeking connection to the ERCOT grid,” the group wrote in a press release. “Already, communities across Texas are dealing with data center projects funded by the biggest names in the tech industry, with many of them choosing to bypass a connection to the grid in favor of building their own fossil-fuel-burning power generation.”
ERCOT is tracking more than 1,800 projects in the queue, representing over 474 gigawatts of electricity, according to the regulator.
Others called on Abbott to cement the declaration into law and call the state legislature into action.
“If they’re important enough to halt approvals and order statewide audits, they’re important enough for the Texas Legislature to address in a Special Session,” Clayton Tucker, a Democrat running for Texas agriculture commissioner, said. “Tell Governor Abbott to back his words with action and call a Special Session to protect Texas water, farmland, electricity, and local communities.”
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Texas Agriculture Department Commissioner Sid Miller likewise called for Abbott to order a special session over the matter, calling the governor’s declaration “more of a filter than a brake.” Miller has been known for his oftentimes contentious relationship with Abbott and the Trump administration. Miller is on his way out of office after Abbott endorsed the incumbent’s rival in the GOP primary, Nate Sheets, for office earlier this year. Sheets won the primary in March.
“This directive is a start, but it is nowhere near enough,” Miller wrote in a lengthy statement. “Without legislative action, this directive is all hat and no cattle—empty political rhetoric wrapped in meaningless fluff. Texans need laws with teeth, not another press release designed to make it look like something is being done while hyperscale projects continue moving forward.”
