Abbott Orders Halt on Texas Data Center Permits While Grid Audit Proceeds

Texas Governor Greg Abbott has instructed state environmental regulators to halt the issuance of permits for data center projects. The suspension will remain in place until the state's grid operator finishes its review.

The move comes from a Republican governor, even as his party's leader in Washington has spent recent weeks criticizing such regulatory restraint.

Texas Data Center Permits on Hold Pending Audit

On September 21, Abbott sent the directive to the Texas Commission on Environmental Quality (TCEQ), which handles permit approvals. The Electric Reliability Council of Texas (ERCOT) anticipates completing its audit by December.

The order extends beyond TCEQ. Abbott stated that no other state agency may authorize data center development until the Public Utility Commission of Texas (PUCT), ERCOT, and the Texas Water Development Board (TWDB) gather the necessary data for well-informed decisions.

PUCT and ERCOT are also required to request that developers disclose information on power generation plans, expected energy usage, water consumption, cooling methods, tax incentives, and ownership.

“Simply put, Texans must come first. 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,” Governor Abbott said.

No existing projects are being canceled. The directive establishes a prerequisite. TCEQ must provide an update by October 19. Additionally, Abbott plans to ask the Legislature to eliminate data center incentives during the next session.

Texas now follows New York's July permit freeze and Pennsylvania's August permitting rules. At the same time, local opposition has already stalled data center projects totaling $68 billion in Q2.

The Republican Rift Trump Continues to Widen

Abbott's freeze places him in opposition to a prominent data center supporter within his own party. In a Punchbowl News interview from early August, President Donald Trump called the Texas approach a “mistake,” suggesting the industry could ultimately surpass oil in scale.

He revisited the topic later, cautioning on Truth Social that areas rejecting the facilities would fall behind and become impoverished. In that message, he stated that China could not be more pleased with the opposition to them.

The rhetoric got tougher again weeks later.

“There is a SICK conspiracy going on against AI and Data Centers, and the only one that is happy about it is China. WHOEVER WINS AI, WINS!” he posted.

Trump also unveiled an “AI Force” on September 19, promising not to “hinder or stifle the Growth of this incredible Industry.” Abbott is heading in the opposite direction, and polling sheds light on the reason. An NBC News Decision Desk survey found 69% of adults oppose local AI data centers, including 57% of Republican voters.

Abbott faces those voters on November 3, as he runs for a fourth term against Democratic state representative Gina Hinojosa. His October 19 deadline for TCEQ lands two weeks before that election.

Meanwhile, the argument for rapid development grows louder this week, with Trump hosting Xi Jinping in Washington for discussions that cover AI. ERCOT is still evaluating more than 474 gigawatts of connection requests, roughly 90% of them from data centers, meaning Texas could clear every permit and still not have enough power to serve them quickly.