Texas Gov. Abbott calls for regulations on data centers, contrasting previous stance

AUSTIN, Texas - Texas Gov. Greg Abbott on Wednesday called for sweeping regulations on data centers to be passed by the legislature in the 2027 session.

 It's a change in stance for Abbott, who previously worked to make Texas the epicenter of the data center buildout.

Abbott letter on data centers

What we know:

In a letter to the Public Utilities Commission of Texas and the Electric Reliability Council of Texas, Abbot laid out his ideas to hold data centers accountable and ensure the costs of their growth are not passed on to taxpayers.

Abbott called for new centers to add power generation to the state's power grid while paying for their own infrastructure costs and connection to the grid. The letter also calls for the mandated use of closed-loop water systems and annual reporting on electricity and water use by data centers.

The governor is also calling on lawmakers to repeal sales tax exemptions and "other outdated or unnecessary incentives" for data centers. Data centers would also be required to consider the communities by reducing their impact through measures such as reducing noise.

What they're saying:

"As Texas continues to welcome innovation and investment, we must ensure that growth strengthens our people and their quality of life without placing undue burdens on Texans and local communities," Abbott wrote in the letter.

In the letter, Abbott directed PUC and ERCOT to submit a joint memorandum by July 17 outlining actions they've taken to prevent risks and added costs to taxpayers because of data center development.

At least one lawmaker applauded the move as state Rep. Helen Kerwin praised Abbott for "protecting Texas ratepayers."

"As these projects are proposed across Texas, we must PROTECT our water resources, rural communities, and state parks while bringing greater transparency and accountability to the process," Kerwin said on X.

Kerwin has come out against the explosive expansion of data centers in the past, calling for full impact studies before development.

"Economic development matters. Innovation matters. Jobs matter. But our water and our power are not negotiable," she said in February.

Dig deeper:

Cal Jillson, a political scientist, tells FOX 4's David Sentendrey that Abbott's recent comments are at odds with his past stance on data centers.

"The Governor has worked very hard to make Texas the epicenter of the data center buildout," Jillson said.

ERCOT delivered a warning in April that Texas power demand could quadruple by 2032, mostly driven by data centers, population increases and oil production.

Jillson also believes Abbott, who is seeking re-election this November, sees the potential for political backlash for other Republican campaigns.

"He is sitting on $130 million, he’s gonna win easily but he knows that there are some races down ticket. Maybe even the U.S. Senate race, certainly the Texas Railroad Commissioner race, which have weaker Republicans that he needs to worry about," Jillson continued. 

"He’s got to try to be sure that Republicans hold the Texas House and Senate by large margins. So that’s what he’s trying to do, just position the Republican Party more than himself so they’re not taking blame for the data center buildout."

Data center pushback in Texas

The move comes as communities and local leaders push back against the rapid expansion of data centers in the state.

Last month, Hill County officials placed a moratorium on new data centers in their county. The move was met with a lawsuit from developers.

Officials rescinded the moratorium last week in response to the pressure from the lawsuit and issued a checklist for new large-scale development in the county.

The Angelina County Commissioners Court advised residents to contact state lawmakers during Tuesday night's meeting after hearing public comments about a proposed data center located outside the Lufkin city limits.

"We have no authority to do a moratorium or to stop any type of development in the county," Angelina County Judge Keith Wright said. "The Texas legislators have consciously limited what we can do, and they've done it on purpose."

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