Texas Gov. Greg Abbott has released regulatory recommendations covering data centers as the state is confronted with a flood of construction projects, and the Data Center Coalition welcomed the governor’s proposals saying the industry already follows many of the recommended practices and is committed to working with agencies to support “responsible infrastructure growth.”
The recommendations are for state legislators to consider in their 2027 session and in a letter to state regulators, Abbott outlined a series of proposals designed to ensure data centers shoulder the costs of their growth rather than Texas ratepayers, reported the Texas Tribune.
Among his legislative priorities:
- requiring new facilities to add power generation to the state’s power grid
- requiring data centers pay for their own grid interconnection and infrastructure costs
- mandating the use of “closed-loop” water systems, which draw a large amount of water at the start but reuse it over some period of years
- require annual reporting by all data centers on electricity and water use
- establishing best-practice standards to address community concerns like noise
- repealing data center sales tax exemptions and “other outdated or unnecessary incentives for data centers”
“The rapid scale of data center development requires oversight to ensure everyday Texans are not burdened with the costs of infrastructure driven by data center expansion, and to ensure that as data centers interconnect to the Electric Reliability Council of Texas (ERCOT) grid, residential electric bills are not negatively affected,” Abbott wrote in the letter first obtained by the Texas Bullpen.
The Tribune described it as a “striking call for industry regulation” by Abbott, a champion of the data center industry. He has called his state the “epicenter” of AI development and even issued statements how his office was “sensitive to the concerns about strain on resources and quality of life.”
