Texas Governor Orders Data Center Permit Halt Pending Grid Review
Texas Governor Greg Abbott ordered the state’s environmental regulator to stop issuing permits for data centers until a review of their impact on electricity and water supplies is completed, widening restrictions on new development.
The Monday directive tells the Texas Commission on Environmental Quality to halt all permits sought by data center projects. Abbott also said other state agencies should withhold related regulatory approvals until officials obtain information needed to assess the projects.
The move extends an August 3 directive requiring the Public Utility Commission of Texas and the Electric Reliability Council of Texas to audit data centers seeking grid connections before allowing projects to advance. At the time, Abbott’s office said ERCOT was considering more than 474 gigawatts of connection requests—over five times its record peak electricity demand. Those requests represent proposed demand, rather than electricity already being consumed.
ERCOT is seeking information from developers of data centers with capacity of at least 25 megawatts that are pursuing connections to its system. Responses are due October 12, and the grid operator plans to publish a report with the utility commission by December 10. The inquiry covers tax benefits, reliance on grid electricity, on-site generation, water consumption, cooling technology, ownership and effects on surrounding communities.
The permitting directive gives developers no fixed date for approvals to resume. Abbott required TCEQ to report on its compliance by October 19, a deadline for an agency update rather than the end of the pause.
Water reporting has become a separate focus of the scrutiny. On Sept. 14, Abbott instructed the Texas Water Development Board to pursue enforcement against major users, including data centers, that fail to submit required water-use surveys. His office said noncompliance can lead to criminal referrals and disqualification from certain water permits, amendments or renewals. The board was also directed to coordinate with ERCOT on water-supply and consumption questions.
Abbott said projects should bear their electrical infrastructure costs, lower household electricity bills and avoid drawing on water needed by local communities. He also plans to seek legislation eliminating financial incentives for data centers, adding a potential change in development economics to the uncertainty over approvals. That proposal would require legislative action.
