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Texas governor's data center moratorium prompts calls for special legislative session

Texas Gov. Greg Abbott speaks during a press conference on Jan. 8, 2025. Abbott announced Friday morning that he wants the Texas Legislature to begin its second special session later that day.
Michael Minasi
/
KUT News
Texas Gov. Greg Abbott speaks during a press conference on Jan. 8, 2025. Abbott announced Friday morning that he wants the Texas Legislature to begin its second special session later that day.

After Texas Gov. Greg Abbott declared a moratorium on new data centers, pending a state-led audit of these fast-emerging and controversial facilities, several of his political opponents issued statements critiquing his actions.

But they weren't criticizing his decision to temporarily prevent new data centers from connecting to the Texas power grid. Instead, they said Abbott's actions didn't go far enough.

"Let's be very clear about this: Abbott can take action now to end the data center madness," Austin state Rep. Gina Hinojosa, the Democratic nominee for governor, said in a statement. "He could issue a moratorium until the legislature meets to put in place real protections for Texans and give them a seat at the table to decide if and how data centers move into their communities."

As Texas sees thefastest-growing data center marketin the country, the governor’s moratorium on data centers has also prompted calls for a special legislative session focused on regulating these facilities.

Large energy consumers are requesting about 474 gigawatts of power from the Texas grid — more than five times the amount of energy used to power the entire state during record-breaking demand. About 90% of those requests are from data centers.

Texas Agriculture Commissioner Sid Miller, a Republican, was among critics calling for a special session. AbbottendorsedMiller’s opponent, Nate Sheets, who defeated Miller in this year’s GOP primary election.

"Without legislative action, this directive is all hat and no cattle — empty political rhetoric wrapped in meaningless fluff," Miller said in a statement. "Texans need laws with teeth, not another press release designed to make it look like something is being done while hyperscale projects continue moving forward."

RELATED: Texas lawmakers question whether multibillion-dollar data center tax break still benefits the state

Advocacy group Public Citizen also called for lawmakers to meet before the next regularly scheduled legislative session in 2027.

"Absent a special session, the governor's powers are limited," the organization said in a news release. "The legislature's next regular session is in five months, putting any legislation signed into law nearly a year away from having any impact."

A spokesperson for Abbott’s office did not immediately respond to a question Tuesday afternoon about whether the governor intended to call a special session.

The governor's latest directive calls for the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to collect information about data centers' water and energy usage, as well as any government funding or incentives they've received and impacts on nearby communities. In response to that directive, leaders for ERCOT and the PUCT asked for state lawmakers to expand the agencies’ authority.

"It seems like some of the things in the directive are also kind of designed to get data centers to maybe act a certain way, like in terms of local tax incentives, grants, abatements, all these other types of things," University of Texas energy researcher Joshua Rhodes said.

In a statement responding to critiques on Monday, the governor's campaign press secretary, Eduardo Leal, said Abbott's directive from earlier this summer "has already prompted major data center companies like Amazon, Google, and Microsoft to embrace his standards that protect communities, the power grid, and the quality of life for Texas families."

"The Governor's goal is simple: lower the costs for Texans while ensuring data centers pay their own way," Leal added.

Beth Garza, an energy consultant who previously served as the independent watchdog for ERCOT, questioned whether the governor and state agencies would be able to enforce his latest directive on data centers without new state laws.

"Unless he's willing to call a special session, which people are asking him to do, I'm not sure how you impose the requirements that his edict seems to want to impose," she said.

The new directive injects further uncertainty into the state's data center market, just as ERCOT has been preparing to take its first steps in a new process for large energy consumers looking to join the power grid.

"It absolutely is very disruptive and, frankly, that's probably the point," Garza said.

Rice University political scientist Mark Jones said the governor may be trying to increase Republican voter turnout in November, particularly among rural voters who tend to be skeptical of data centers.

"They see data centers bringing little in the way of financial or economic benefits to their county," he said.

RELATED: Brazoria County passes resolution outlining requirements for future data centers

According to arecent pollfrom the University of Texas at Austin and the Texas Politics Project, more than half of survey respondents in Texas said they would oppose a data center in their community. Opposition was highest among rural survey respondents.

Abbott haspledgedto make data centers a priority during the 2027 legislative session, vowing to work with lawmakers to end tax breaks for these facilities, rein in their water and energy usage and shield Texans from the costs of connecting data centers to the power grid.

"I think one thing that we will see in the legislative session in 2027 is a push to give counties some more tools that they can use to prevent the establishment of industries that have an adverse effect on the quality of life of their residents," Jones said.

Still, Jones said, state lawmakers are likely to see intense pushback from data centers' lobbyists in the coming year.

"It's a David versus Goliath type struggle because if there's one thing we know, data centers have a tremendous amount of money, and they're able to buy the top lobbyists," Jones said.
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