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Texas, yes Texas, puts limits on data centers

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A group of protesters hold signs reading

Texas is putting a halt to data center projects that try to tap into public utilities under new regulations issued by Governor Greg Abbott.

The new order mandates the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT) complete extensive audits of data center developers before they can connect to the state's utility grid. Notably, developers must provide information on "state and local tax incentives, grants, abatements, or other public financial assistance," prospective water and electricity use, and controlling interests in their projects.

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There are currently 1,800 projects awaiting ERCOT approval to join the state grid. Around 90 percent of them are for data centers, and the projects would cumulatively demand 474 gigawatts of electricity, according to the governor's office. The projected demand is more than five times the grid’s peak record, reported the Texas Tribune.

"Our top priority is to protect Texans’ safety and quality of life. Any project that fails to comply with the requirements set forth by the PUCT and ERCOT, and by state law, must be denied connection to the Texas grid. Simply put, Texans must come first," Abbott wrote in a press release issued Aug. 3.

Texas has been beset by power outages in recent years, including an infamous power crisis in 2021.

Texas is home to over 500 data center projects, according to the tracking website Data Center Map. Texas is second only to Virginia in the number of data centers, often referred to as the nation's "data center alley."

The proliferation of such centers in Texas has been linked to a regulatory permitting loophole that has allowed companies to build energy-intensive facilities without providing public notice, according to recent reporting by Wired. Many communities have said they feel blindsided by massive construction projects appearing in their backyards, and several coalitions have emerged calling for a statewide moratorium on all data center initiatives.

Recent crowdsourced data compiled by environmental advocate Erin Brockovich documented more than 1,300 residential complaints tied to utility usage and environmental health concerns from data centers — more than double the next highest state, Pennsylvania. Residents of Sulphur Springs, Texas, home to a controversial data center campus project led by MSB Global, have submitted nearly 400 complaints alone.

The state's new audit process will also require developers to provide plans to protect communities in surrounding areas, such as "noise mitigation, light controls, traffic improvements, and emergency response coordination," with the understanding that every community is "unique."



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