Texas Governor Greg Abbott has instructed state environmental regulators to halt the issuance of permits for data center developments. This temporary freeze will stay in place until the state’s grid operator finalizes its ongoing audit.
The move comes from a Republican governor whose party leader in Washington has spent the past month criticizing such regulatory hurdles.
Texas Data Center Permits Stop Until the Audit Clears
Abbott issued the directive on September 21 to the Texas Commission on Environmental Quality (TCEQ), which is the agency responsible for granting these permits. The Electric Reliability Council of Texas (ERCOT) anticipates completing its audit by December.
The scope of the order extends beyond the TCEQ. Abbott stated that no other state agency is permitted to authorize data center projects until the Public Utility Commission of Texas (PUCT), ERCOT, and the Texas Water Development Board (TWDB) gather sufficient information to make well-founded decisions.
Additionally, the PUCT and ERCOT are instructed to require developers to provide details regarding power generation plans, estimated energy consumption, water usage, cooling systems, tax subsidies, and ownership structure.
“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.
While the directive does not cancel any existing projects, it establishes a prerequisite for them. The TCEQ is required to submit a progress report by October 19. Furthermore, Abbott intends to ask the Legislature to eliminate data center incentives during the upcoming legislative session.
With this action, Texas joins New York, which implemented a permit freeze in July, and Pennsylvania, which adopted new permitting rules in August. Concurrently, local pushback has already stalled $68 billion worth of data center projects during the second quarter.
The Republican Split Trump Keeps Widening
Abbott’s moratorium places him in conflict with a prominent supporter of data centers within his own party. In an early August interview with Punchbowl News, President Donald Trump labeled the Texas approach a “mistake,” suggesting that the industry could eventually surpass the oil sector in scale.
He revisited the topic on Truth Social, cautioning that communities turning away these facilities would lag behind and remain impoverished. In that same post, he asserted that China would be thrilled by the backlash against the industry.
His rhetoric grew even sharper 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 unveiled an “AI Force” on September 19, vowing not to “hinder or stifle the Growth of this incredible Industry.” In contrast, Abbott is heading in the opposite direction, a stance supported by polling data. An NBC News Decision Desk survey revealed that 69% of adults are opposed to local AI data centers, a sentiment shared by 57% of Republican voters.
Abbott faces those voters on November 3 as he runs for a fourth term against Democratic state representative Gina Hinojosa. His October 19 deadline for the TCEQ falls two weeks ahead of that election.
Meanwhile, arguments for moving quickly are intensifying as Trump hosts Xi Jinping in Washington for discussions that encompass artificial intelligence. ERCOT is currently evaluating over 474 gigawatts of connection requests, with approximately 90% originating from data centers, meaning Texas could approve every single permit and still lack the capacity to supply them with power in a timely manner.
Subscribe to our YouTube channel to watch leaders and journalists provide expert insights