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ARTICLE · 06 OCTOBER 2026

Texas Governor Directs A Halt On Data Center Permitting With State Agency Audits

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Texas Governor Greg Abbott has directed state agencies to halt all data center permits until comprehensive audits assess the projects' impacts on electric infrastructure, residential ratepayers, and water resources. The directive requires data centers to fully fund necessary electric infrastructure and comply with enhanced reporting requirements, while the governor signals potential legislative action to codify new protections and phase out certain tax incentives.

United StatesEnvironment
Joshua Forman
Joshua Forman
Shawn Ronda
Shawn Ronda
Paul M. Williams
Paul M. Williams
Elizabeth Ross Hadley
Elizabeth Ross Hadley
Michael A. Boldt
Michael A. Boldt

On Sept. 21, 2026, Texas Gov. Greg Abbott directed the Texas Commission on Environmental Quality (TCEQ) to halt permits sought by data center projects until the Electric Reliability Council of Texas (ERCOT) completes a statewide audit of data centers undergoing the ERCOT interconnection process. Per the letter, no state agency may move forward with regulatory approvals related to data center development until the Public Utility Commission of Texas (PUCT), Texas Water Development Board (TWDB), and ERCOT have obtained and reviewed the ERCOT audit needed to assess projects’ impacts. 

The directive continues a broader state review of data center development. On June 10, 2026, Gov. Abbott directed the PUCT and ERCOT to review the impact of data centers on electric infrastructure and residential ratepayers. On Aug. 3, 2026, Gov. Abbott issued a further directive pausing Batch Zero large-load interconnections. On Sept. 14, 2026, he directed TWDB to enforce Texas water-use reporting

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