Governor Greg Abbott on Sept. 21 directed the Texas Commission on Environmental Quality to halt all permits sought by data centers until the Electric Reliability Council of Texas completes its audit of data center projects, according to a news release from the Governor’s office.
The directive extends beyond TCEQ. Because the Public Utility Commission of Texas, ERCOT and the Texas Water Development Board require the audit information to make informed decisions, no state agency is to move forward with regulatory approvals related to data center development until that information is acquired, the release said.
“Simply put, Texans must come first,” Abbott said in the release. “Data centers must pay their own way, protect our grid and water, and complete the ERCOT and TWDB audits. Until they do, TCEQ will issue no permits sought by data center projects.”
The order builds on a series of recent actions described in the release. Abbott previously directed the PUCT and ERCOT to audit all data centers undergoing ERCOT’s interconnection process so that their development does not compromise the reliability of the Texas electric grid or put the state’s natural resources at risk. On Sept. 14, he directed the TWDB to compel data centers to comply with water-use reporting requirements, to impose legal consequences for past and future failures to comply with state law, and to partner with ERCOT on the audit to obtain additional water-use information. The three agencies will determine the impact of data centers on grid reliability and security and on the water resources needed by Texas communities, according to the Governor’s office.
The release lays out the conditions the Governor expects data center projects to meet. Projects must cover all electrical infrastructure costs, result in lower residential electric bills and complete the ERCOT audit. Data centers must not use water needed by local communities, must report electricity and water usage, and must abide by setback requirements intended to protect the communities in which they operate, the release said.
As ERCOT and the TWDB conduct their audits, TCEQ is to align its permitting decisions with the Governor’s directives and use the information from those audits. The agency must provide an update to the Office of the Governor on its compliance with the directive by Monday, Oct. 19, 2026, according to the release.
Looking ahead to the next legislative session, the Governor’s office said Abbott will work with the Legislature to eliminate any financial incentives for data centers. The release also noted that the Governor sent a letter outlining the directive to TCEQ Executive Director Kelly Keel.