Abbott freezes Texas data center permits pending grid audit

Texas Governor Greg Abbott ordered the Texas Commission on Environmental Quality to stop issuing permits for data center projects. The pause remains in effect until the Electric Reliability Council of Texas completes its audit, which ERCOT expects to finish by December. Abbott sent the directive on September 21. The order also says no other state agency may approve data center development until the Public Utility Commission of Texas, ERCOT and the Texas Water Development Board obtain information needed for informed decisions. PUCT and ERCOT are directed to ask developers to disclose power generation plans, projected consumption, water use, cooling technology, tax subsidies and ownership. The directive does not cancel projects, but sets a condition for approvals. TCEQ must report an update by October 19. Abbott plans to ask the Legislature to eliminate data center incentives in its next session. The freeze follows New York's July permit freeze and Pennsylvania's August permitting rules. Local resistance has already stalled data center projects worth $68 billion in the second quarter. Abbott's position conflicts with President Donald Trump, who called the Texas stance a mistake in an early August Punchbowl News interview and argued that the industry could become larger than oil. Trump later warned on Truth Social that communities rejecting the facilities would become backwards and poor, and said China could not be happier with opposition to them. He later described opposition to AI and data centers as a conspiracy, said that whoever wins AI wins, announced an AI Force on September 19 and promised not to hinder or stifle the industry's growth. An NBC News Decision Desk poll found that 69% of adults oppose local AI data centers, including 57% of Republican voters. Abbott seeks a fourth term against Democratic state representative Gina Hinojosa on November 3, two weeks after his October 19 deadline for TCEQ. Trump is also hosting Chinese President Xi Jinping in Washington for talks that include AI. ERCOT is weighing more than 474 gigawatts of connection requests, with roughly 90% from data centers, so approving every permit would not ensure that Texas could supply them with power quickly.