Texas Governor Abbott directed the Texas Commission on Environmental Quality (TCEQ) to halt all new data center permits statewide.

Governor Greg Abbott has directed the Texas Commission on Environmental Quality (TCEQ) to halt all permits sought by data center projects pending completion of audits by the Electric Reliability Council of Texas (ERCOT) and the Texas Water Development Board (TWDB). The Public Utility Commission of Texas (PUCT), ERCOT, and TWDB require this information to make informed decisions on data center development, and no state agency shall proceed with regulatory approvals until the audits are complete.

"Simply put, Texans must come first," Governor 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 has directed the PUCT and ERCOT to audit all data centers undergoing ERCOT's interconnection process to ensure their development does not compromise the reliability of the Texas electric grid or put Texans' natural resources at risk. On September 14, he directed TWDB to compel data centers to comply with water-use reporting requirements, impose legal consequences for past and future non-compliance with state law, and partner with ERCOT on the audit to obtain additional water-use information.

Data center projects must meet four key requirements: cover all electrical infrastructure costs, result in lower residential electrical bills, complete the ERCOT audit, and not use water needed by local communities. Data centers must also report electricity and water usage and abide by setback requirements designed to 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 is required to provide an update to the Office of the Governor on its compliance with this directive by Monday, October 19, 2026.

Looking ahead, Governor Abbott will work with the Legislature next session to eliminate any financial incentives for data centers.