Texas Pauses New Data Center Permits Pending Completion of Grid and Water Audits

en.Wedoany.com Reported - On September 21, Texas Governor Greg Abbott asked the Texas Commission on Environmental Quality to pause accepting and approving permit applications for data center projects, and also required state agencies not to advance regulatory approvals related to data center development until the Electric Reliability Council of Texas completes an audit of data centers' grid impacts and the Texas Water Development Board completes its related water use review. The Texas Commission on Environmental Quality was required to report its implementation progress to the Governor's Office by October 19.

This permit pause extends the special data center audit launched by Texas in August. On August 3, Abbott asked the Public Utility Commission of Texas and the Electric Reliability Council of Texas to conduct a comprehensive review of all data center projects currently advancing grid interconnection, and relevant projects could not proceed until the audit was completed. Officials disclosed that at that time, the scale of data centers and other large loads in ERCOT's interconnection queue exceeded 474 GW, equivalent to more than 5 times Texas' historical peak grid load. Projects that fail to meet the relevant requirements of the PUCT and ERCOT will be denied access to the state's grid.

The latest requirement also adds a water use audit. On September 14, the Texas Governor's Office asked the Texas Water Development Board to verify data centers' water use declarations and to jointly obtain data centers' electricity and water use data with ERCOT. This audit will cover data centers' impacts on grid reliability, grid security, and local water resources, and state regulators will decide subsequent project approvals based on the audit results.

According to the approval conditions published by the Governor's Office, data center developers must bear the cost of new power infrastructure for their projects and declare actual electricity and water use; projects must not occupy water resources needed by local communities and must also meet construction requirements such as project setbacks. The state government also requires large data centers to complete the ERCOT audit before they can continue advancing related grid interconnection and state-level approval procedures.

This permit pause directly affects a large number of AI and cloud computing infrastructure projects being planned in Texas. In recent years, Texas has attracted a large number of hyperscale data centers and AI computing facilities to apply for grid interconnection, and as of August, the load in ERCOT's process had exceeded 474 GW. The current pause first covers state-level permits and regulatory approvals, and projects already in the interconnection process must still pass reviews by the PUCT, ERCOT, and water resource-related authorities before they can continue to advance.