Gov. Greg Abbott’s Sept. 21 order halting state permits for data centers reaches a group his first pause left alone: projects that plan to build their own power plants instead of solely drawing from the grid. One of the largest now waiting on the state is Fermi America’s pending application for 5 gigawatts of additional gas-fired generation at Project Matador, the company’s campus in Carson County northeast of Amarillo.
In a letter to the executive director of the Texas Commission on Environmental Quality, the state’s environmental permitting agency, Abbott directed the agency “to pause the issuance of all permits related to data center projects until ERCOT completes its review.” The letter goes further than the agency: “no other state agency shall move forward with regulatory approvals related to data centers until this information is acquired.”
Abbott’s August pause ran through ERCOT, the agency that runs the grid for most of the state. ERCOT said that pause could only stop grid connections for data centers seeking at least 75 megawatts, enough for nearly 19,000 homes, according to Houston Public Media. Projects building their own generation were not included. Neither were projects outside ERCOT’s territory, which excludes parts of East Texas, El Paso and the Panhandle, where Amarillo sits. An environmental permit is different. A company that burns natural gas on site needs an air permit from the state wherever it plugs in.
TCEQ spokesperson Ryan Vise said the agency “has paused the issuance of all air and water permits and authorizations related to the construction or development of infrastructure directly supporting data centers,” according to Houston Public Media. The agency has not said publicly which pending applications it has set aside.
Fermi’s is on the record. The company, co-founded by former Gov. Rick Perry, won TCEQ approval Feb. 25 for about 6 gigawatts of gas-fired generation at the site, according to KFDA. It filed for 5 more gigawatts on March 27, the company said. That application, air permit No. 183462, was set for a public meeting in Panhandle on Aug. 24. TCEQ’s notice for that meeting now says it was canceled and “will be rescheduled for a later date.” No new date appears on the agency’s hearing calendar. Five gigawatts is about 67 times the 75-megawatt line ERCOT used to define the projects its August pause could reach.
Fermi plans as much as 17 gigawatts at the campus from gas, nuclear, solar, batteries and grid connections. It has said much of that power would be produced on a private grid, though the campus also expects to draw some power from the public system, ABC 7 Amarillo reported Aug. 10, the day Fermi announced a $6.5 billion lease with its first tenant, the AI cloud company TensorWave.
The project is also the kind of case Abbott’s conditions were written for. In October 2025 the Amarillo City Council voted 4-1 to sell Fermi up to 2.5 million gallons of water a day at twice the rate charged to other industrial customers, ABC 7 reported. Critics have questioned Fermi’s projections on water use, and residents and environmental groups opposed the February air permit, which TCEQ approved despite requests for a contested hearing. Fermi has also faced a shareholder lawsuit, which it denies, and the April removal of its co-founder as chief executive.
Abbott’s letter sets conditions for every project: data centers “must cover all electrical infrastructure costs, result in lower residential electrical bills, and complete the ERCOT and TWDB audits.” They “must not use water needed by local communities” and must meet setback requirements. The freeze applies whether or not a project already brings its own power, water and money. It holds the most self-supplied plans in the same line as those leaning entirely on the public grid until the audit ends.
The law firm Troutman Pepper Locke, which advises data center developers, noted that many observers had assumed the governor’s actions would not reach projects running separate from the grid, and asked whether “bring your own power” air permits would be paused. TCEQ’s statement suggests they are.
Abbott’s case is that the state cannot judge any permit without the audit’s data. The ERCOT and Texas Water Development Board survey of more than 400 data centers asks sworn questions about water use due Oct. 12. ERCOT expects to finish its audit in December. TCEQ owes the governor a report on its compliance by Oct. 19, and Abbott said he will ask the Legislature, which convenes in January, to “eliminate any financial incentives for data centers.”