Texas is effectively halting development of new data centers as Gov. Greg Abbott, a Republican running for re-election, confronts growing opposition to the projects and concern over their environmental impacts.
Mr. Abbott on Monday ordered state environmental regulators to pause their review of data center permit applications until audits can be performed to evaluate how the projects affect the power grid and water supplies.
The action expanded scrutiny of data centers planned in the state, including on a growing number of projects designed to run on their own sources of power, separate from the grid. Dozens of new gas-fired power plants have been proposed to support data center projects across Texas, Appalachia and the Mountain West, a boom that could cause air pollution to surge in those regions.
Texas had previously welcomed the data center industry and was forecast to drive much of the growth in the nation’s computing capacity over the coming years. But Mr. Abbott’s shift underscores rising concerns in the communities living near the hulking facilities.
“Simply put, Texans must come first,” Mr. Abbott said in a statement. “Data centers must pay their own way, protect our grid and water,” and complete the audits, which he ordered in August as pressure against data centers began to mount, even within his own party.
Cameron Poursoltan, the Texas director of energy policy for the Data Center Coalition, an industry group, said the industry would work with the state “so that our industry’s growth in Texas remains responsible, transparent, and responsive to the communities where our members operate.”
Mr. Poursoltan said coalition members whose projects are in the process of connecting to Texas’ power grid, known as the Electric Reliability Council of Texas, or ERCOT, were complying with the state’s demand for audits of effects on the grid.
Less than a year ago, Mr. Abbott had called Texas an “epicenter of A.I. development.” As artificial intelligence increases demand for high-powered computing, the state is forecast to host up to half of the new data center capacity expected to develop in the United States from 2027 through 2030, according to Jefferies, an investment bank.
But as a political backlash has grown, Mr. Abbott has joined officials in other states in trying to slow the projects. In August, he called for a pause on data centers that were seeking approval to draw power from the electric grid. That did not affect projects building their own power plants and would not request connection to the grid, nor did it affect data centers that would use less than 75 megawatts of power.
This week, he expanded that pause. In a Monday letter to the leader of the Texas Commission on Environmental Quality, a state agency, Mr. Abbott said the broader halt on data center projects was needed to “ensure Texans’ natural resources and way of life are protected.” The commission is responsible for reviewing air and water permits for data centers and other industrial facilities.
Representatives for Mr. Abbott declined to answer questions about how the governor’s directive would affect projects developing their own power sources.
In the letter, Mr. Abbott said data center projects must pay for any needed electrical infrastructure projects, report their electricity and water usage, and result in lower electricity bills for residents. Mr. Abbott also said he would work with Texas lawmakers to eliminate state financial incentives for data center development.
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