Abbott says no to rural data centers

Republican Texas Railroad Commissioner Wayne Christian discusses data centers in Texas. [CBS DFW]

Gov. Greg Abbott escalated his campaign to restrict artificial intelligence data center construction in rural Texas communities during a campaign appearance in East Texas this week, calling for prohibitions on new facilities in sparsely populated neighborhoods and additional state oversight of the industry's expansion.

Abbott outlined a series of requirements he believes should apply to any company seeking to build such facilities in Texas. The governor said operations must fund their own infrastructure investments, generate their own electrical power and recycle water supplies rather than drawing from local resources. He also demanded that data centers operate in ways that reduce electricity costs for Texans statewide and that the companies relinquish state tax incentives they currently receive.

The governor's renewed push reflects mounting opposition to the facilities from rural residents, who cite concerns about massive electricity consumption, water usage and noise pollution. A University of Texas at Austin poll found that 62 percent of rural Texans—a voting bloc that typically supports Republican candidates—back restrictions on data center development. Seven rural counties, including Hays, Caldwell, Henderson, Hill, Hood, Somervell and Van Zandt, have formally requested that state lawmakers prioritize regulating data center construction either through a special legislative session or during the 2025 regular session beginning in January.

Abbott's position represents a reversal from earlier messaging in which he promoted Texas as the nation's leading hub for artificial intelligence innovation. In a June letter to state utility regulators, Abbott directed the Public Utility Commission to prevent data center development from harming Texans and their communities, instructing the agency to limit negative consequences on local populations.

The mounting demands for development restrictions have drawn pushback from some state officials. Republican Texas Railroad Commissioner Wayne Christian disagreed with Abbott's ban proposal, arguing that rural communities face economic decline and that data centers could reverse that trend. Christian contended that Texans possess the capability to address the environmental and operational challenges posed by the facilities without imposing development prohibitions.

The debate carries significant infrastructure implications. The Electric Reliability Council of Texas, which manages most of the state's electrical grid, reported that more than 480 large data centers have sought permission to connect to the system through 2032, signaling substantial anticipated growth in the sector across the state.