Governor Greg Abbott has announced a call to prohibit the construction of data centers in rural neighborhoods across Texas. This declaration was made during a campaign event in Bullard on Tuesday night, marking a notable pivot in his previously favorable outlook on the industry.
In a speech to his supporters, Abbott expressed his concerns about data centers encroaching on residential areas, stating, “We must prohibit them from building AI data centers in rural Texas neighborhoods, and we must eliminate the tax break they are getting. They must be responsible for funding their own projects here in Texas.”
His remarks reflect a broader shift in policy, as just last month he urged increased oversight of data centers in the state. Abbott asserted that any new AI data facility considering Texas for expansion must come equipped with its own financial resources, energy supply, and water recycling systems, all while ensuring minimal impact on electricity costs for local residents.
This change in tone follows Abbott’s earlier enthusiasm for the artificial intelligence sector, where he hailed Texas as the “epicenter of AI development,” particularly after a $40 billion investment announcement from Google aimed at expanding data center operations in the state.
In a letter directed to the Public Utilities Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT), Abbott outlined several regulatory proposals intended to hold data centers accountable. He suggested that new facilities should contribute to the state’s power grid and bear the costs associated with their infrastructure and grid connections. His proposals also included mandatory closed-loop water systems and annual reporting requirements regarding energy and water consumption.
Additionally, Abbott is urging lawmakers to eliminate sales tax exemptions and other incentives that benefit data centers, emphasizing the need for these companies to consider their impact on local communities, including measures to mitigate noise pollution.
Abbott’s office has set a deadline of July 17 for responses from PUCT and ERCOT regarding these recommendations. His Press Secretary, Andrew Mahaleris, stated, “Governor Abbott has been clear that data centers cannot come before Texas families. These steps protect Texans from higher costs and negative impacts on their communities.”
The governor’s stance aligns with growing resistance from local communities against the swift proliferation of data centers throughout Texas. In May, officials in Hill County instituted a moratorium on new data center projects, a decision that was later challenged by developers through legal action. Facing pressure, the county rescinded the moratorium but introduced a checklist for assessing large-scale developments.
Furthermore, the Angelina County Commissioners Court has encouraged residents to reach out to state legislators regarding a proposed data center near Lufkin. County Judge Keith Wright highlighted the limitations imposed on local governance, noting, “The Texas legislators have consciously limited what we can do, and they’ve done it on purpose.”
