Texas Gov. Greg Abbott pumped the brakes on new data centers that threaten to overwhelm the state’s electrical grid, following his push to ban the facilities in the rural part of the state.
Abbott paused approvals for the new centers until there’s a review of those that already requested to connect to the Lone Star State’s grid operator, Electric Reliability Council of Texas.
ERCOT is considering more than 474 gigawatts of requests — more than five times the state’s record peak electricity demand.
The governor, on Monday, directed the Public Utility Commission of Texas (PUCT) and ERCOT to deny grid connection requests for any project that doesn’t meet state requirements, Axios reported.
About 90% of new connection requests to the Texas grid are from data centers, according to Abbott, who has previously signaled an interest to make data center regulation a top priority as he seeks reelection ahead of a new legislative session next year.
Abbott is seeking information from data centers requesting connection to Texas grids, including: if the data center plans to provide some of its own electricity; the center’s estimated annual and peak electric consumption as well as their water consumption and its sources.
“Our top priority is to protect Texans’ safety and quality of life,” Abbott said in a statement, the outlet reported.
“Texans must come first,” he declared.
The Data Center Coalition is “hopeful” the directive from Abbott “will help separate those who are responsible water and energy stewards from those who are not,” Dan Diorio, executive VP of state policy and government affairs, told Axios.
“Done correctly, this review can showcase the good actors in the data center industry rather than delaying them unnecessarily,” Diorio added.
Abbott’s push for grid request denials comes after he called for a ban on data center developments in rural Texas last week.
“I made clear already: Any AI data center even thinking about coming here — they got to bring their own money, bring their own power, reuse their own water and do it in a way that reduces the cost of electricity for residents across our state,” Abbott said.
Texas is considered one of the most lucrative states for data centers, partly because of its generous tax incentives — giving out over $1 billion on tax breaks to data centers each year, according to the Texas Tribune.
Abbott directed state officials in June to take up data center regulation and called upon lawmakers to phase out what he described as “outdated tax incentives.”
Last month, lefty gubernatorial hopeful Gina Hinojosa called on Abbott to pause data center construction across the Lone Star State.
“So nice to see another strongly worded letter from Abbott after he proudly made Texas the Wild West of data centers,” Hinojosa said in a statement Monday, Axios reported.
“Abbott’s call for a ‘pause’ could be for one day – and no one buys it,” the Democratic candidate added.
Lawmakers signaled a willingness to appealing or updating the state’s tax incentives at a Texas State committee meeting last month, after learning that data centers were increasingly getting tax breaks.
Out of 138 tax break recipients, only 20 had been audited and six weren’t meeting state requirements, according to the Texas Comptroller of Public Accounts, the outlet reported.
“Pursuing smart reforms does not mean being unfriendly to business,” Texas Republican Sen. Joan Huffman said.
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