Abbott issues data center directive after widespread protests

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(The Center Square) – Gov. Greg Abbott on Monday issued another directive related to data centers after a legislative hearing was held and statewide protests are ongoing. 

Last week, Republican state lawmakers backtracked on a law they previously supported that fast tracked data expansion at taxpayers’ expense. Some rural Texans have demanded a special session be called to ban data center expansion in Texas, The Center Square reported. Ahead of the hearing, multiple anti-data center events were held statewide. 

Abbott on Monday directed the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to conduct a comprehensive verification and audit of all data centers advancing through ERCOT’s interconnection process. The agencies must complete the audit before any data center project moves forward, he said.  

ERCOT is currently considering approximately more than 474 gigawatts of requests to connect to the Texas grid, more than five times Texas’ record peak electricity demand for ERCOT. 

The overwhelming majority of new power requests – 90% – are from data centers. 

“That unprecedented load growth could endanger the reliability and stability of the Texas electric grid,” Abbott said.

“Our top priority is to protect Texans’ safety and quality of life,” Abbott said when issuing the directive. “Any project that fails to comply with the requirements set forth by the PUCT and ERCOT, and by state law, must be denied connection to the Texas grid. Simply put, Texans must come first.”

The directive requires information gathering from data centers: how much state and local tax incentives, grants, abatements, or other public financial assistance they have received or expect to receive; whether they “are providing their own power or depending on the ERCOT grid for that power,” including projected annual and peak electricity consumption; and “any effort and progress to construct or procure on-site electric generation including generation type, or other measures to reduce demand on the ERCOT grid.”

They are also to disclose if they “are bringing their own water and reusing their own water as opposed to using water needed by local communities,” including projected annual and peak water consumption, anticipated sources of water supply, the cooling technology they plan to use; and what measures are being taken to reduce impacts on the local community.

It’s the second PUCT and ERCOT directive Abbott has issued in one month. Last month, he directed the agencies to ensure data centers’ interconnections would result in reduced residential electrical bills and add to Texas’ electric capacity.

That directive requires data centers to pay for all electric infrastructure costs, not to pass costs onto local ratepayers, and to use water-efficient technologies like closed-loop cooling systems and not drain local water resources. It also requires them to use noise-reduction technology and other measures to lessen impacts on communities. 

Abbott said he’s working with state lawmakers to propose codifying these regulatory restrictions, including requiring yearly reporting of electricity and water usage data to the agencies. He also called for the legislature to repeal sales tax exemptions and “other outdated or unnecessary incentives for data centers.”  

Under Abbott and the Republican-led legislature, billions of dollars in tax breaks have enabled data center expansion in areas where counties have little recourse, residents in townhalls across the state argue. 

The anti-data center issue is uniting Republicans and Democrats ahead of the midterm election.

Opposition to data centers includes tax breaks, increased electric costs, water, air and noise pollution, draining limited water resources among other concerns. 

State Rep. Gina Hinojosa, D-Austin, who is running against Abbott in November, points to Abbott touting that he’s brought more AI and data centers to Texas than any other state. Last fall, Abbott touted Google announcing its plan to invest $40 billion to build AI infrastructure in Texas. “Texas is the epicenter of AI development, where companies can pair innovation with expanding energy,” he said, The Center Square reported.

Hinojosa said she has been meeting with Texans whose “entire lives have been taken over by the data centers that Greg Abbott invited into Texas. When I'm governor, I'll make sure their voices are heard,” she said.

Hood County residents, who are historically conservative, have been at the forefront of data center opposition. More than 10,000 acres are being sold in the rural county for AI, data centers and other energy projects, which residents argue are already destroying home values and quality of life.