Texas is tightening its clampdown on data centers, this time cutting off the environmental permits they need to build and expand in the state.
Gov. Greg Abbott on Sept. 21 ordered the Texas Commission on Environmental Quality (TCEQ) to stop all permits sought by data centers until the Electric Reliability Council of Texas (ERCOT) completes its audit.
Abbott said no state agency can move forward with data center approvals until the grid and the Texas Water Development Board audit are done, because regulators need that information to make decisions.
“Simply put, Texans must come first,” Abbott said in a statement. “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 TCEQ halt comes as Abbott has cracked down on data center expansion across the state throughout the summer.
Texas' recent actions regulating data centers
In June, Abbott directed the Public Utilities Commission of Texas and ERCOT to ensure data centers do not shift the financial and resource burden onto Texans during expansion and construction.
The regulations took effect in July. But after public testimony to state lawmakers revealed gaps in the data the state requested, the state asked for more information. On Aug. 3, Abbott paused construction of new data centers as the state conducted a full audit of proposed data centers seeking to connect to the state grid to ensure they comply with Abbott's June directive.
Since the audit and regulations were announced, more than 40 companies, including Amazon, Google, OpenAI and Anthropic, have publicly said they will comply with Texas' new data center standards.
On Sept. 14, Abbott directed the TWDB to use its statutory authority to compel major water users to comply with the state's water-use reporting requirements and to impose legal consequences for past and future failures to comply with state law.
Texas eyes new laws regulating data centers in 2027
Abbott indicated that he would work with the 90th Texas Legislature, which convenes in January 2027, to do the following:
- Require data centers to reduce impacts on local communities by implementing best practices such as setbacks, noise-reduction technology and other measures.
- Codify state regulators' actions requiring data centers to pay for their own electric infrastructure costs.
- Ensure data centers add to Texas’ electric capacity — not just to its electric demand.
- Require that all new data centers be built with water-efficient technologies such as closed-loop cooling systems.
- Require large data centers to report electricity and water usage annually to state regulators.
- Repeal sales tax exemptions and other outdated or unnecessary incentives for data centers.
Mateo Rosiles is the Texas Connect reporter for USA TODAY and its regional papers in Texas. Got a news tip for him? Email him at mrosiles@usatodayco.com.
This article originally appeared on USA TODAY: Texas widens its data center crackdown by freezing key permits
