Texas Governor Abbott Pauses State Data Center Permitting--Until December

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Written by Eric Funderburk for IIR News Intelligence (Sugar Land, Texas)

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Summary

The Texas governor has directed the state's environmental regulator to halt permits for data centers until ERCOT and state's water board have completed an audit regarding the facilities' power and water consumption as well as funding.

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Tightening the Reins

Texas Governor Greg Abbott (R) has ordered the state's environmental agency overseeing air and water permits to halt further permits for data centers until the state's primary grid operator and the Texas Water Development Board (TWBD) complete an audit regarding power and water use.

While Texas previously opened its arms widely to data center development, Abbott has thrown a temporary wrench in the works for new facilities as constituents, particularly those in his strong rural base, push back against the facilities as an upcoming election looms that could provide an outlet for their anger.

An initial move came from Abbott in August when he ordered the state's primary grid operator, the Electric Reliability Council of Texas (ERCOT), and the Public Utility Commission of Texas (PUCT) to halt power connection permits for new data centers until an audit could be performed on the facilities, ensuring they pay for their own electric infrastructure rather than existing ratepayers, reuse their water, make moves to preserve the quality of life and rely on minimal tax incentives. ERCOT serves about 75% of Texas' land area and 90% of its power load.

Not long after the order for the audit, an ERCOT executive said the agency intended to make an initial filing of the audit process and results in December. However, this required ERCOT to send requests for information to hundreds of proposed data centers and have answers back by the anticipated December 10 filing. No word appears to have been made on how progress is going, but Abbott has already fired off a warning regarding a lack of responsiveness from the industry regarding its water use.

Cracking Down on the Wild West

In a June legislative hearing, state lawmakers learned that only 17% of the state's data centers had responded to the Texas Water Development Board's 2025 survey regarding annual water use. While this number appeared to have increased to around 28% by September, the board reported that some of the largest gaps in response came from new developments. The TWDB reported that 267 of the 329 surveyed facilities were new to the process, and only 22.5% of these had responded.

The surveys are a key component in the board's formulation of its 2027 state water plan, and it now sits without this critical data as key deadlines approach. What was the penalty for the lack of response, which is listed as a Class C misdemeanor? Nothing being enforced, apparently. At least not until this week.

Prior to the permitting freeze, on September 14, Abbott ordered the Water Development Board to begin enforcing penalties for past and future reporting failures, suggesting a bit of a laissez-faire attitude previously had been taken toward these legally required submissions. At the same time, Abbott also looped the water board into ERCOT's audit to gain access to information regarding future water use, but it has been unclear how this may affect the timeline of the audit's completion, so presumably the December goal still stands.

The Latest Move

The governor's most recent move against data centers came Monday, when he ordered the Texas Commission on Environmental Quality (TECQ), which is responsible for air and water permits, to halt permitting for data centers until ERCOT and the TWDB have the info they need.

Abbott's latest order will affect data centers that would have been unaffected by the ERCOT connection freeze, either because they are building their own behind-own-meter power or fall outside of ERCOT's coverage. The TWDB's jurisdiction covers the entirety of the state as does the Public Utility Commission's that oversees the entirety of the state's power.

As ERCOT expects to complete its audit by December, the permitting pause will probably only be a matter of months, but will provide a better snapshot of resource use than a prior approval process that seemed to be barreling forward with a minimal view on the overall picture of resource use, setting Texas up to rival Virginia as one of the U.S.' (and the world's) biggest data center hotspots. For related information, see September 22, 2026, article - As Data Center Construction Plans Soar, U.S. Electric Utilities Race to Serve Once-in-a-Lifetime Load Growth.

The Current Picture

Industrial Info Resources data show more than $94 billion worth of data center projects presently under construction in Texas and an amazing $1.18 trillion worth in various stages of planning and engineering within the state. Not all of these future projects will move forward as planned, however, and with more stringent oversight taking affect in the state, the weaker projects will be weeded out. However, multiple projects are already permitted and ready to go, particularly expansions to existing facilities.

Key Takeaways

• Texas Governor Greg Abbott has taken further steps to pause data center permitting within the state.
• ERCOT has said it aims to complete an audit regarding data center resources consumption by December.
• Industrial Info Resources data show more than $94 billion worth of data center projects are presently under construction in Texas and more than $1 trillion in various stages of planning and permitting.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).