Greg Abbott Orders Halt to Texas Data Center Permits Pending ERCOT Audit

Governor Greg Abbott (R) has directed Texas environmental regulators to halt permits sought by data center projects until ERCOT completes an audit examining their impact on the state's electric grid and water resources.

What did Abbott order?

Gov. Abbott directed the Texas Commission on Environmental Quality (TCEQ) to halt data center permit approvals while the Electric Reliability Council of Texas (ERCOT) completes its audit. Abbott said the state agencies need the audit information before making regulatory decisions about data center development.

Gov. Greg Abbott: "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."

What is ERCOT auditing?

The audit covers data centers moving through ERCOT's interconnection process, including their projected electricity demand, reliance on the grid, on-site generation plans, water sources and consumption, cooling technology, financial incentives, and potential community impacts.

ERCOT's current request for information applies to data center developers seeking interconnection for facilities of at least 25 megawatts. Developers have until October 12 to submit information, with ERCOT planning to publish a report by December 10.

Abbott also directed the Texas Water Development Board to enforce water-use reporting requirements for major users, including data centers, and coordinate with ERCOT on the audit.

The governor has said data centers should not use water needed by local communities and should report electricity and water consumption.

What happens next?

TCEQ must align its permitting decisions with the ERCOT and TWDB audits and provide Abbott's office an update on compliance by October 19. Abbott also said he will work with the Legislature next session to eliminate financial incentives for data centers.