Texas Gov. Abbott freezes environmental permits for AI data centers in expanding state power audit

Texas Governor Greg Abbott has ordered a freeze on environmental permits for AI data centers, pending an audit of their energy use, water consumption, and tax incentives. This follows a prior halt on grid connections amid public backlash over rising power bills and environmental concerns, as over 470 gigawatts of projects await grid connection.

Texas Governor Greg Abbott ordered the Texas Commission on Environmental Quality to stop issuing new permits for data centers until regulators complete a comprehensive audit of the facilities' energy use, water consumption, and tax incentives. The directive effectively freezes all state-issued permits to data center developers, who had flocked to Texas for its abundant electricity, land, and pro-business reputation. Since the AI boom began roughly three years ago, Texas became one of the fastest-growing data hubs globally. However, intensifying public backlash over the facilities and fears about AI prompted Abbott last month to freeze new data center grid connections and order an audit. By that time, over 470 gigawatts of data center projects and other large energy users were in line to connect to the grid—more than five times the state's peak demand. The Electric Reliability Council of Texas is in the early stages of auditing data center power use, tax incentives, and water consumption. Abbott stated, "Simply put, Texans must come first. Data centers must pay their own way, protect our grid and water, and complete the audits." Abbott joins a growing number of governors who once raced to attract data center investments but are now tightening restrictions amid constituent fears about rising power bills and environmental issues. Energy fellow Ed Hirs noted Abbott was walking back earlier pronouncements about data centers leading to lower electricity prices.