Texas Governor Greg Abbott has ordered state environmental regulators to stop issuing permits for data center projects. The pause remains in effect until the state’s grid operator completes its audit.

The decision comes from a Republican governor whose party leader in Washington has spent the past month attacking this kind of restraint.

Texas Data Center Permits Stop Until the Audit Clears

Abbott sent the directive on September 21 to the Texas Commission on Environmental Quality (TCEQ), the agency that issues those permits. The Electric Reliability Council of Texas (ERCOT) expects to finish its audit by December.

The order reaches past TCEQ. Abbott wrote that no other state agency can approve data center development until the Public Utility Commission of Texas (PUCT), ERCOT, and the Texas Water Development Board (TWDB) obtain the information to make informed decisions.

PUCT and ERCOT are also directed to ask developers to disclose power generation plans, projected consumption, water use, cooling technology, tax subsidies, and ownership. 

“Simply put, Texans must come first. 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,” Governor Abbott said.

Nothing here cancels a project. The directive sets a condition. TCEQ must report an update by October 19. In addition, Abbott plans to ask the Legislature to strip data center incentives next session.

Texas now follows New York’s July permit freeze and Pennsylvania’s August permitting rules. Meanwhile, local resistance has already stalled data center projects worth $68 billion in Q2.

Follow us on X to get the latest news as it happens

The Republican Split Trump Keeps Widening

Abbott’s freeze puts him at odds with a key data center advocate in his own party. President Donald Trump called the Texas stance a “mistake” in a Punchbowl News interview in early August, arguing that the industry could end up bigger than oil.

He returned to the subject later, warning on Truth Social that communities rejecting the facilities would end up backwards and poor. In that post, he said China could not be happier with the movement against them.

The language hardened again weeks later.

“There is a SICK conspiracy going on against AI and Data Centers, and the only one that is happy about it is China. WHOEVER WINS AI, WINS!” he posted.

Trump also announced an “AI Force” on September 19 and promised not to “hinder or stifle the Growth of this incredible Industry.” Abbott is moving the other way, and the polling explains the incentive. An NBC News Decision Desk poll found 69% of adults oppose local AI data centers, including 57% of Republican voters.

Abbott faces those voters on November 3, when he seeks a fourth term against Democratic state representative Gina Hinojosa. His October 19 deadline for TCEQ falls two weeks before that vote.

Meanwhile, the case for speed gets louder this week, with Trump hosting Xi Jinping in Washington for talks that include AI. ERCOT is still weighing more than 474 gigawatts of connection requests, roughly 90% of them from data centers, so Texas could clear every permit and still lack the power to serve them quickly.

Subscribe to our YouTube channel to watch leaders and journalists provide expert insights

Source: BeInCrypto