Texas Governor Greg Abbott has directed state environmental regulators to pause the issuance of permits for new data center projects. This moratorium will remain in place until the state grid operator, ERCOT, completes a comprehensive audit of the sector. The directive, issued on September 21, also restricts other state agencies from approving developments until the Public Utility Commission of Texas and the Texas Water Development Board gather sufficient data.
Developers are now required to disclose detailed information regarding their power generation plans, projected energy consumption, water usage, cooling technologies, and tax subsidies. The Texas Commission on Environmental Quality is expected to provide an update on the situation by October 19. Furthermore, Governor Abbott intends to propose legislation in the next session to eliminate existing tax incentives for data center operators.
The decision places Abbott at odds with Donald Trump, who has publicly criticized efforts to restrict the growth of the AI and data center industries. Despite Trump's support for rapid expansion, local opposition remains significant, with polls indicating that 69% of adults oppose the construction of local AI data centers. Meanwhile, ERCOT is currently reviewing over 474 gigawatts of connection requests, the vast majority of which originate from data center projects.
Texas joins other states in implementing stricter oversight, following similar measures taken in New York and Pennsylvania earlier this year. Data center projects valued at $68 billion faced delays in the second quarter due to local resistance. Governor Abbott faces a reelection bid on November 3, and the upcoming audit report is scheduled for release just two weeks before the election.
