Gov. Greg Abbott announced that QTS Data Centers has committed to comply with the statewide data center standards and guidelines he established earlier this summer and to participate in the state’s comprehensive audit, according to an Aug. 6 news release from the governor’s office.
“Let’s be clear: the growth of data centers must not come before the quality of life of Texans,” Governor Abbott said in the release. “I established clear guardrails to ensure data centers protect our electric grid, conserve our water, respect our neighborhoods, and pay their own way. They must not pass costs on to Texas families or interfere with their quality of life. QTS is setting an example of responsible data center development by embracing my standards, and any company that wants to do business in Texas should expect to do the same.”
The governor’s directives instruct the Public Utility Commission of Texas and the Electric Reliability Council of Texas to ensure data centers pay for their own electric infrastructure instead of shifting costs onto Texas families and small businesses, reuse their own water, reduce the cost of electricity for Texans, avoid disrupting residential neighborhoods, and eliminate reliance on taxpayer-funded incentives, according to the release. Abbott also directed the two agencies to pause all pending data center interconnection requests until each project successfully completes ERCOT’s comprehensive audit.
Under that audit, the PUCT and ERCOT will examine how each project discloses taxpayer-funded incentives and public financial assistance, details its projected electricity demand and plans for on-site generation, identifies water sources and water reuse procedures, and reduces impacts on neighboring property owners through measures such as noise mitigation, light controls, setbacks, traffic improvements, and emergency response coordination. Projects must also disclose their ownership and controlling interests. Any company that fails to comply with the audit process will be denied the ability to interconnect to the Texas grid, the governor’s office said.
The release noted responses from other companies since the directives were issued: Diode announced it failed to meet the standards and will not pursue a proposed data center in Henderson County; Amazon sent a letter committing to work with the state; Google welcomed the standards and committed to working with state leaders; and Chevron announced plans to build a Texas power plant for a Microsoft data center that mitigates impacts to water resources and the grid, bringing it into compliance. The announcement signals that the state’s new guardrails are becoming the price of admission for data center development in Texas.