Abbott Halts Texas Data-Center Permits Pending Grid Audit

Texas Governor Greg Abbott has directed the Texas Commission on Environmental Quality to stop issuing permits sought by data centers until the Electric Reliability Council of Texas completes its audit. The directive also says state agencies should not advance regulatory approvals until they have the grid and water information needed for their decisions.

An August grid freeze set the stage

The new order reaches beyond Texas’ earlier intervention in the connection process. In August, Abbott ordered audits of data centers seeking to connect to the state grid and imposed a moratorium on new grid approvals. This month’s directive makes permitting part of the same review, rather than leaving it on a separate track.

Water data is now part of the approval test

Abbott has asked ERCOT, the Public Utility Commission of Texas and the Texas Water Development Board to assess effects on grid reliability and security, along with the water resources Texas communities need. His directive attaches broader conditions to data-center development, not just a requirement to supply information.

The governor’s stated conditions

• Data centers must cover electrical-infrastructure costs and lower residential electricity bills.
• They must report electricity and water use and complete the ERCOT audit.
• They must avoid using water needed by local communities and meet setback requirements.

October brings a compliance deadline

TCEQ must update the governor’s office on its compliance with the directive by October 19. Abbott also says he will work with the Legislature in its next session to eliminate financial incentives for data centers, a proposal that remains a future legislative goal rather than current law.

The next consequential result is whether the audits give Texas agencies a basis to restart approvals under the governor’s conditions. Until then, the state’s review of data-center growth includes both grid connections and permits.