Gov. Abbott Orders Halt to Texas Data Center Permits Pending State Audits

AUSTIN, TX — Gov. Greg Abbott has directed the Texas Commission on Environmental Quality to halt permits sought by data centers until the Electric Reliability Council of Texas completes an audit of projects seeking to connect to the state's electric grid.

Under the directive announced Monday, state agencies are not to move forward with regulatory approvals related to data center development until information from the audit is available.

“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.”

The directive follows an Aug. 3 order from Abbott requiring the Public Utility Commission of Texas and ERCOT to conduct an audit of data centers moving through ERCOT's interconnection process. The audit is examining projects' electricity demand, power generation plans, water consumption, public financial assistance and potential effects on neighboring communities.

Abbott also directed the Texas Water Development Board on Sept. 14 to enforce state water-use reporting requirements for major water users, including data centers, and work with ERCOT to obtain additional information about water use.

The PUCT, ERCOT and TWDB are tasked with determining the potential effects of data center development on electric grid reliability and security and on water resources needed by Texas communities.

Under Abbott's directives, data center projects must cover their electrical infrastructure costs and complete the ERCOT audit. The governor has also directed that data centers not use water needed by local communities, report electricity and water use and comply with setback requirements intended to reduce impacts on surrounding communities.

TCEQ is required to use information gathered through the ERCOT and TWDB audits when making permitting decisions.

Abbott directed TCEQ to provide his office with an update on its compliance by Oct. 19.

Abbott also said he plans to work with the Texas Legislature during its next session to eliminate financial incentives for data centers.