Hilarious. And kind of pathetic.
Amid growing public backlash to the rapid buildout of data centers across Texas, Gov. Greg Abbott on Monday announced a moratorium on the approval of data centers until regulatory agencies can audit proposed data centers seeking connection to the state’s electric grid.
It is unclear how long the audit will take, but Abbott is asking the Public Utility Commission of Texas and the Electric Reliability Council of Texas to ensure data center developers provide information on tax breaks they will receive; power use and generation; water use and cooling operations; efforts to reduce impacts on local communities; and ownership of the facility. Any projects that fail Abbott’s ordered “comprehensive verification and audit” should be denied connection to the grid, the governor said.
Abbott’s letter to the PUCT and ERCOT directs them to conduct the audit on all data centers advancing through ERCOT’s interconnection queue, or the line for energy intensive projects seeking connection to the electric grid. ERCOT is currently tracking more than 1,800 projects in the queue, representing over 474 gigawatts of electricity, or more than five times the grid’s record for peak demand, according to ERCOT. Approximately 90% of the new power requests are data centers, Abbott said.
ERCOT and the PUCT are already conducting a review of some of the projects in the queue through a process known as “batch zero.” It is unclear if Abbott wants agencies to audit those projects or all those currently in the queue.
“Our top priority is to protect Texans’ safety and quality of life,” Abbott wrote in a statement. “Any project that fails to comply with the requirements set forth by the PUCT and ERCOT, and by state law, must be denied connection to the Texas grid. Simply put, Texans must come first.”
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Lawmakers have spent much of this year seeking clarity about the facilities’ electricity use, water use and access to tax incentives as the Legislature considers tighter regulation of the industry.
Abbott cited the failure of some data centers to comply with a recent PUCT’s survey measuring water and power usage as the reason the audit was needed because it hinders the agencies’ ability to make informed decisions.
Developed by the PUCT in collaboration with the Texas Water Development Board, the survey collects information about a data center’s water consumption, cooling systems, water sources, electricity demand and whether facilities are connected to the state’s electric grid or have their own on-site power source such as a gas-fired power plant. The responses are meant to inform long-term state water planning.
State law requires the PUCT to share the data with the water development board and state environmental regulators and to submit a report to the governor and the Legislative Budget Board by the end of the year.
Rep. Brad Buckley, R-Salado, a member of the House Natural Resources Committee called survey participation “pretty pathetic” during a June hearing. Of the 377 companies PUCT staff said it notified when the survey was launched, 28 submitted responses.
See here for the previous update. It’s almost as if we should have tried to have some safeguards in place before we threw open the gates and started handing out sales tax exemptions like lollipops at a pediatrician’s office. Oh, and maybe not took away all discretion from local governments as they tried to be responsive to their residents. Who could have ever seen all these problems coming?
The Chron adds some details.
Experts said it is unclear how much of an effect the directive will have, in large part because the governor’s letter does not detail what the audit should include or how long it should take.
ERCOT is already studying the first batch of large projects — known as “batch zero” — for approval to connect to the grid. Those approvals are still six to nine months away, said Joshua Rhodes, an energy researcher at the University of Texas at Austin.
“It depends what they do with this information, how long they take, how long they give everyone to provide this information, what kind of assessment,” Rhodes said. “If they give everyone three months to get this information in and another three months to assess it, that would pause things.”
A coalition representing data centers said it hopes the audit will help separate the good actors from the bad ones and urged regulators to move swiftly.
“Done correctly, this review can showcase the good actors in the data center industry rather than delaying them unnecessarily, ensuring Texas will continue to be the national leader in economic development,” said Dan Diorio, executive vice president of state policy and government affairs at the Data Center Coalition.
Abbott’s position on data centers has shifted rapidly amid a bubbling backlash to them, especially in rural parts of the state that have long been GOP strongholds. The governor touted Texas as the “epicenter of AI development” as recently as November.
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Democrats, meanwhile, have sought to capitalize on the backlash. State Rep. Gina Hinojosa, an Austin Democrat running against him, last month called for Abbott to halt all data center construction in the state until lawmakers craft rules for the projects.
“So nice to see another strongly worded letter from Abbott after he proudly made Texas the Wild West of data centers,” Hinojosa said Monday. “Abbott’s call for a ‘pause’ could be for one day – and no one buys it.”
Sid Miller, the outgoing Republican Agriculture Commissioner who Abbott campaigned against in the primary, called his directive “empty political rhetoric.”
“There’s no perimeters around it,” Miller said of the audit. “He’s a lawyer. That’s just lawyer speak for nothing. He’s just dancing around the issue. It’s another wink and a nod to his data center campaign donors that they’re going to be fine.”
Calling for an audit rather than embracing a direct moratorium could help Abbott avoid drawing the ire of President Donald Trump, who slammed New York Gov. Kathy Hochul for halting data center construction in that state and called the centers “tremendous WINS for the States and Communities that are lucky enough to get them.”
Yes, we wouldn’t want to upset Grandpa Trump, would we? You know how he gets. In the meantime, seeing Abbott flail about so desperately is quite the delight. Keep on keeping this in the news, Greg. You’re doing a heck of a job.