Texas Governor Greg Abbott criticized data center developers for creating grid strain and regulatory friction that he claims have undermined the state’s expansion plans.
Governor Greg Abbott (R-TX) stated that technology companies developing data centers “dug their own grave” by failing to secure local community support. Earlier this month, Abbott imposed a moratorium on new data center development across Texas, halting progress until state regulators can audit proposed sites seeking electric grid connections. He is now clarifying his revised stance as these large-scale infrastructure projects encounter widespread public pushback.
The moratorium establishes guidelines and guardrails governing data centers’ water and electricity consumption rates. Under the new framework, facilities must also contribute to lowering electricity costs for ratepayers and ensure operations do not disrupt Texas neighborhoods or rural communities. Previously, Texas incentivized data center growth with tax breaks, but Abbott reversed course amid mounting concerns over the state’s strained water supplies and power grid. He specifically criticized the rapid deployment pace adopted by developers.
“They pop up in places that nobody ever heard of before until they started the construction,” Abbott said. “And so they had not been working in collaboration with the state. They had not been in collaboration with local governments, and so they basically dug their own grave for the problem that’s been caused for them, and that’s why they got the backlash they deserve.”
During a Sunday interview with ABC News’s This Week co-anchor Jonathan Karl, Abbott emphasized the necessity of municipal buy-in. “Gaining the support of people in local communities is essential,” he said. “Because they did not do that, that’s why I am now coming in as governor, saying, ‘Listen, if you’re a data center and you want to operate in Texas, you have to first get the approval of those in local communities.'” He added, “And that’s why these new standards are in place to make sure they’re not going to be able to operate until they come into compliance with the standards that I have set.”
Karl pointed out that Texas environmental regulators recently approved an application to power a massive Meta data center project in El Paso within 20 days. Abbott clarified that the approval occurred at the local level, not the state level. “To actually begin the data center, they don’t need to get approval from the state of Texas, which is the way the law currently works,” he explained. “One thing that they would need to do, eventually, is to get the approval to plug into the power grid.” Because El Paso operates outside ERCOT’s primary power grid, the project was not subject to immediate grid operator approval. Abbott noted that, given the clarity of the moratorium, developers of the El Paso facility “have announced they will be in full compliance with the guardrails and guidelines that I’ve set out.”
The construction pause is expected to take “several months” for up to 300 projects statewide. Historically, Abbott swiftly championed data center expansion before fully assessing downstream impacts. Last year, following Google’s announcement of a $40 billion investment, he labeled Texas the “epicenter of AI development.” According to the Texas Tribune, the state currently hosts 335 operational data centers, with at least 248 additional projects underway, ranking it second only to Virginia nationwide.