Gov. Abbott orders Texas environmental regulators to stop issuing data center permits during ERCOT audit
Texas Gov. Greg Abbott ordered state environmental regulators on Sept. 21, 2026, to stop issuing new permits for data centers while the operator of the state power grid audits proposed projects.
In a letter to the Texas Commission on Environmental Quality, Abbott directed the agency to halt all new data center permits while the Electric Reliability Council of Texas conducts the audit. ERCOT manages the state power grid and is reviewing proposed data center projects across Texas.
The audit is scheduled to finish by the end of the year. It will examine the tax exemptions data centers receive, their electricity and water use plans, how they will limit disturbances to local communities, and the ownership of each proposed facility.
Abbott said the pause will give regulators enough information before they decide whether to approve permits.
“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 wrote to TCEQ Executive Director Kelly Keel.
The order expands Abbott’s earlier pause on data center development. In August, he directed the Public Utility Commission of Texas and ERCOT to audit all proposed data centers and stop approving new grid connections until the audit is complete.
On Sept. 14, Abbott told the Texas Water Development Board to work with ERCOT to collect water use information from data center companies. The board had already sent a mandatory survey to data centers and other entities earlier in the year.
As of Sept. 1, about 30% of the 324 facilities surveyed by the water development board had responded, officials said.
Abbott said the board should report data centers that fail to submit water use information to local law enforcement.
The Texas Water Development Board was required to respond to Abbott’s order by Oct. 14. TCEQ must respond by Oct. 19.
ERCOT plans to finish collecting information from proposed data centers in late November. The agency intends to release its audit reports on Dec. 10 and present the findings to the Public Utility Commission during a Dec. 17 meeting.
Abbott issued the orders after months of public criticism over the rapid expansion of data centers in Texas. Last year, he promoted the state as “the epicenter of AI development” and announced major investments tied to the industry.
One of those deals involved Google committing $40 billion to three new data centers and related infrastructure through 2027.
Now, Abbott and other state officials are examining whether proposed projects can handle their electricity and water demands and whether residents will be affected by their growth.
The permit freeze applies to new environmental permits issued by TCEQ. It does not end the review of projects already in the state permitting pipeline.
Attorney General Ken Paxton said on Sept. 24 that his office is investigating data centers that did not respond to the Texas Water Development Board survey.
The audit and permit pause will remain in place until the state completes its review of the data center industry.
