More data centers complying with Abbott’s directive as up to 1,800 projects halted

Audio By Carbonatix

(The Center Square) – After Gov. Greg Abbott issued two data center directives and a temporary pause on data center development in Texas, dozens of companies have said they will comply. 

The temporary pause impacts roughly 1,800 projects seeking regulatory approval to connect to the Texas grid, requiring nearly 474 gigawatts of power – five times Texas’ record peak electricity demand, The Center Square reported. Abbott argues the requests are untenable especially after the Public Utility Commission previously requested information from companies and only received a response from 10% of them. 

At a campaign event in Austin on Tuesday, Abbott explained the pause he’s put in place on data center applications and what his directives require.  

“One thing I've heard across the state in rural, suburban and urban areas is that Texans appreciate the level-headed approach that I've brought to the data center equation,” he said. “I've outlined guidelines and guidepost standards that are required by every data center in the state from when I pressed pause on no new data centers.” 

“For every data center that's operating or that's trying to operate in the state of Texas,” he said his directives require four things. The companies “have to make sure they are not taking water needed by local communities. They must not take power that's needed by the Texas power grid. They must operate in a way that lowers the cost of electricity and they must not operate in neighborhoods or in rural communities that's disruptive. Those are very common-sense principles that Texans by and large agree upon.”

He also said he wanted to explain what led to his decision to pause data center expansion. The agency responsible for Texas’ grid, ERCOT, “was on a pathway where they were considering adding to our power grid through data centers five times the amount of power that we have available. This simply is not going to work,” he said. 

“To make matters worse, the PUC had requested every data center either currently operating or seeking to operate in Texas to give data to the state about how much power they are currently using and how much they would be using. The PUC got less than a 10% response.” That lack of response “was untenable,” he said. 

Abbott’s directives ordered state regulators to audit the companies prior to approval and ensure they “pay for their electric infrastructure instead of shifting costs onto Texas families and small businesses, reuse their own water, reduce the cost of electricity for Texans, do not disrupt residential neighborhoods to preserve Texas’ quality of life, and pay their own way and eliminate reliance on outdated taxpayer-funded incentives,” The Center Square reported.

State Rep. Gina Hinojosa, D-Austin, who is challenging Abbott in November, has called on Abbott to issue an emergency executive order to place a moratorium on all new data center development and call a special legislative session “until the legislature can come together and ensure these new data centers are built with American union jobs.”

Abbott argues the directives he’s issued “are already working. They are being universally implemented by data centers across the state. One data center that could not comply chose to end operations before even beginning construction.”

His directives will ensure data centers “protect our electric grid, conserve our water, respect our neighborhoods, and pay their own way. They must not pass costs on to Texas families or interfere with their quality of life,” he said. If the companies fail the regulatory audit, their projects won’t be approved, he said. 

The Data Center Coalition said its members are committed to “ensuring data centers are true partners in every Texas community where we operate, protecting residential ratepayers, strengthening grid reliability, and promoting responsible water stewardship.” It also said it will work to “distinguish between speculative projects and serious, committed investors in an expeditious fashion to put communities first.”  

Multiple companies have issued statements in response to Abbott’s directives: Riot Platforms,Comanche Circle Data Center, Power House Data Centers, CoreWeave, Bitdeer,  CyrusOne, Ionic Digital, New Era Energy & Digital, Switch, Hanwha, Prologis, Ecolab, Crusoe, Stack Infrastructure, Anthrop\C, Nightpeak Energy, Amazon, Lancium, Cipher Digital, Galaxy, Compass Datacenters, Montera Infrastructure, Microsoft, Hut 8, Equinix, Core Scientific, Vantage Data Centers, SB Energy, Google, Rowan Digital Infrastructure, CleanSpark Inc., EdgeConneX, Stream Data Centers, among others, The Center Square reported.

One of the largest AI developers in Texas, Oracle, said it’s committed to transparency, “protecting ratepayers, conserving water, creating good-paying jobs, and investing in local economies. The future of AI should strengthen the communities that make it possible, and we look forward to continuing to work with state and local leaders as we advance our investments across Texas.”

Hinojosa argues a data center “gold rush” occurred because of a bill Abbott signed into law in 2015. It gave billions in tax breaks to multi-million and billion-dollar companies over 20 years. State lawmakers have since backtracked on previous support for the tax breaks, The Center Square reported. Abbott has now called for an end to them. 

Widespread protests are ongoing against data center development in Texas. State Sen. Paul Bettencourt said there are 335 data centers operating across Texas. That’s more than double than the 140 currently being built, The Center Square reported.