Abbott pauses data center permits pending water and power review

Texas (KBTX) - Gov. [KWTX-TV News 10]

Gov. Greg Abbott moved to restrict data center expansion across Texas, instructing the state's environmental regulator to suspend approval of new facilities pending completion of comprehensive audits into the industry's effect on power supplies and water resources.

In a Sept. 21 correspondence to Kelly Keel, who heads the Texas Commission on Environmental Quality, Abbott outlined a freeze on data center permits that will remain in place until the Electric Reliability Council of Texas and the Texas Water Development Board finish their examinations. The governor declared that state agencies cannot proceed with regulatory clearances for data center ventures until those investigations provide their findings to the Public Utility Commission of Texas, ERCOT and the water board.

Abbott emphasized protection of resident interests in his directive. "Simply put, Texans must come first," he stated. "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 restrictions stem from Abbott's earlier orders directing the PUC and ERCOT to scrutinize all data centers within ERCOT's interconnection queue, assessing whether their growth threatens grid dependability or jeopardizes the state's natural resources. A subsequent Sept. 14 directive ordered the water development board to enforce compliance with data center water-reporting standards, establish penalties for violations spanning both past and future infractions, and collaborate with ERCOT in gathering supplemental water consumption data.

Moving forward, data center operators must satisfy several conditions to gain approval. Companies must finance all electrical grid infrastructure necessary for their operations, deliver reductions in residential power costs and complete both the ERCOT and water board investigations. The facilities must also refrain from consuming water supplies required by surrounding municipalities, maintain detailed records of electricity and water consumption, and comply with distance requirements protecting nearby communities.

Abbott directed TCEQ to synchronize future permitting decisions with his requirements and mandated the agency submit a compliance status report to his office by Oct. 19, 2026. Additionally, Abbott signaled plans to work with state legislators during the next session to eliminate subsidies and financial support programs for data center projects.