Texas Governor Abbott halts all state-issued permits for data centers until grid audit is complete

HOUSTON, Sept. 21 (Reuters) - Texas Governor Greg Abbott on Monday barred the state's environmental agency from issuing new permits for data centers until regulators complete a massive audit of the energy-hungry facilities seeking to connect to the Texas electrical grid.

The Republican governor's directive to the Texas Commission on Environmental Quality effectively freezes all state-issued permits for data centers.

Since the artificial intelligence boom began roughly three years ago, Texas has become one of the fastest-growing data hubs in the world. But growing public backlash over the facilities, and fears about AI more broadly, prompted Abbott last month to freeze the connection of new data centers to the state grid and order an audit of the facilities.

Those connections are now pending an audit by grid regulators, which have been directed to examine data center power use, tax incentives, end users and water consumption, among other factors.

“Simply put, Texans must come first,” Abbott said. “Data centers must pay their own way, protect our grid and water, and complete the (audits),” Abbott said in a statement.

Texas grid regulators have estimated that their audit of data centers could last until late next year.