State halts data center permitting

AUSTIN — Gov. Greg Abbott Monday directed the Texas Commission on Environmental Quality (TCEQ) to halt all permits sought by data centers until the Electric Reliability Council of Texas (ERCOT) completes its audit. Because the Public Utility Commission of Texas (PUCT), ERCOT, and the Texas Water Development Board (TWDB) require that information to make informed decisions, no state agency shall move forward with regulatory approvals related to data center development until it is acquired.

“Simply put, Texans must come first.”

— Gov. Greg Abbott

“Simply put, Texans must come first,” Abbott said. “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.” Abbott directed the PUCT and ERCOT to audit all data centers undergoing ERCOT’s interconnection process so their development does not compromise the reliability of the Texas electric grid and does not put Texans’ natural resources at risk.

On Sept. 14, he directed TWDB to compel data centers to comply with water-use reporting requirements, impose legal consequences for past and future failure to comply with state law, and partner with ERCOT on the audit to obtain additional water-use information. The PUCT, ERCOT, and TWDB will determine the impact of data centers on grid reliability and security and on the water resources needed by Texas communities.

Data center projects must cover all electrical infrastructure costs, result in lower residential electrical bills, and complete the ERCOT audit. Data centers must not use water needed by local communities, must report electricity and water usage, and must abide by setback requirements that will protect the communities in which they operate.

As ERCOT and TWDB conduct their audits, TCEQ must align its permitting decisions with the governor’s directives and use the information from those audits. TCEQ shall provide an update to the governor’s office on its compliance with this directive by Oct. 19, 2026.