Just seven months ago, Gov. Greg Abbott trumpeted Google’s $40 billion plan to add three data center campuses in Texas. Now, amid growing public outcry over such projects, Abbott is pushing for a regulatory crackdown on data centers in the Lone Star State.
Abbott recently sent a letter to leaders of the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) proposing stricter oversight of the state’s data centers. Texas is home to more than 400 data centers, with many more on the way, and is poised to become the world’s largest data center market.
Among other things, Abbott wants to:
- Ensure residential electric bills go down — not up — as data centers connect to ERCOT’s grid, which supplies power for about 90 percent of Texans.
- Require data centers to cover the costs of upgrades to deliver electricity to the power-hungry facilities.
- Repeal sales tax exemptions and other “outdated or unnecessary” financial incentives for data centers.
- Institute “best practices,” such as property setbacks and noise-reduction technology, to ease the impact of data centers on nearby residents.
- Demand that all new data centers, which use a tremendous amount of water, be built with water-efficient technology.
- Require large data centers to generate annual reports on their use of electricity and water.
Abbott has set a July 17 deadline for the PUC and ERCOT to address his recommendations.
“As Texas continues to welcome innovation and investment, we must ensure that growth strengthens our people and their quality of life without placing undue burdens on Texans and local communities,” Abbott wrote.
Abbott’s call for tighter control of data centers has elicited both praise and skepticism.
In a social media post on X, Texas House Speaker Dustin Burrows, a Lubbock Republican, thanked Abbott for seeking “accountability and reform” in the state’s data center industry. Burrows has made data centers one of his priority issues for the 2027 state legislative session.
State oil and gas regulator Wayne Christian, a member of the Texas Railroad Commission, weighed in with similarly positive comments about Abbott’s directive. He says an outright ban on data centers isn’t the answer to residents’ complaints about new facilities.
“The Texas way is not to answer innovation with government overreach or fear-driven bans,” Christian, whose agency wasn’t cited in Abbott’s letter, said in a statement posted on X. “Our job is to protect prosperity, safeguard taxpayers and ensure the infrastructure that powers our economy remains strong and reliable.”
Gina Hinojosa, an Austin Democrat who’s challenging Abbott in this November’s gubernatorial race, took issue with the governor’s edict on data centers.
“Greg Abbott is changing his tune on data centers because he knows his policies are unpopular,” Hinojosa, a state representative, wrote on X. “Nobody believes the arsonist is gonna be the one to put out the fire.”
Abbott’s call for stepped-up regulation of data centers echoes many of the concerns expressed by the state chapter of the Sierra Club, an environmental nonprofit.
“The growth of data centers reflects a broader transformation taking place across Texas,” the Sierra Club says on its website. “The state is becoming a hub for the technologies that will shape the future economy, from artificial intelligence to advanced computing and cloud services. At the same time, Texans deserve transparency about how these projects affect the communities where they are built.”
