Gov. Abbott orders Texas environmental regulators to stop issuing new data center permits until ERCOT audit finishes
Gov. Greg Abbott ordered the Texas Commission on Environmental Quality on Sept. 21 to stop issuing new environmental permits for data centers while the Electric Reliability Council of Texas audits proposed data center projects across the state.
The order extends an earlier pause Abbott imposed on new data center development while the state reviews the industry's tax breaks, water and electricity demands, local impacts and ownership structures. ERCOT, which operates the Texas power grid, is conducting the audit and expects to finish by the end of the year.
In a letter to TCEQ Executive Director Kelly Keel, Abbott said the pause will give the agency enough information and time to evaluate future permit applications.
"This process will ensure that TCEQ has sufficient information, including information gained from pending audits, and time to thoroughly review all proposed permits to make fully informed permitting decisions," Abbott said.
The order follows a Sept. 14 directive in which Abbott told the Texas Water Development Board to work with ERCOT to collect water use information from data center companies. Abbott also told the board to refer companies that fail to provide the information to local law enforcement.
The water board sent a mandatory survey to data centers and other entities earlier this year. As of Sept. 1, officials said about 30% of the 324 surveyed facilities had responded.
Abbott began issuing related orders in June, when he told grid regulators to make sure residents do not pay for data center growth. On July 17, Thomas Gleeson, chair of the Public Utility Commission of Texas, responded by outlining agency actions and asking the Legislature for more regulatory authority.
On Aug. 3, Abbott ordered the Public Utility Commission and ERCOT to audit all proposed data centers and stop approving new grid connections until the audit is complete. The environmental permit halt extends that review to TCEQ.
Attorney General Ken Paxton said Sept. 24 that his office is investigating data centers that have not responded to the water board survey.
TCEQ must respond to Abbott's permit order by Oct. 19, according to the governor's letter. The water development board must respond by Oct. 14.
ERCOT plans to finish collecting information from proposed data centers in late November and intends to release audit reports on Dec. 10. ERCOT officials are scheduled to present the audit findings at a Public Utility Commission meeting on Dec. 17.
Abbott, who is seeking a fourth term, has moved to slow the growth of an industry he helped promote after calling Texas "the epicenter of AI development" last year. The state had previously announced major investments tied to data center expansion, including Google's $40 billion commitment to three new data centers and related infrastructure through 2027.
