Texas Weighs Data Center CostsTexas Weighs Data Center CostsCoverage from KERA, Salon, and others
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Texas is moving to scrutinize data center development more closely after state officials identified unusually large electricity and water demands, extensive grid-connection requests, and significant public costs tied to tax incentives.
Gov. Greg Abbott has directed state agencies to review proposed connections and project disclosures, while lawmakers consider changes to tax exemptions and local governments weigh moratoriums or stronger public participation. The central issue is whether new facilities can proceed without shifting grid, infrastructure, environmental, or community costs to Texas residents.
It highlights the fiscal dimension of the debate by reporting the estimated cost of data-center tax incentives.
KXAN / Adam Schwager, Carolina Hauger, Arezow Doost, Eden Shimanek, Dylan McKim
Key Numbers
18 counties
Texas counties with data centers under investigation
including Tarrant County
“Data centers in 18 Texas counties, including Tarrant, are being investigated by the attorney general’s office, which is demanding that the developments report water usage as required by law.”
KERA
30% percent
surveyed data centers that reported water use
of 329 surveyed data centers · last year
“According to The Texas Tribune, only a percentage of data centers had reported water use in recent years. The report said 30% of 329 surveyed data centers reported last year.”
KERA
329 data centers
data centers surveyed
surveyed for water-use reporting · last year
“According to The Texas Tribune, only a percentage of data centers had reported water use in recent years. The report said 30% of 329 surveyed data centers reported last year.”
KERA
161 billion gallons a year
projected data-center water use
Texas · 2030
“In 2025, data centers consumed an estimated 25 billion gallons of water, according to the Houston Advanced Research Center. Water use could rise to 161 billion gallons a year by 2030—about 2.7% of all water used in Texas, or roughly the amount consumed by 1.3 million households across the country.”
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Escalation
Texas ties data-center grid access to water-reporting compliance
Texas has made water-use disclosure a concrete enforcement issue: state officials are investigating data centers for missing required reports and threatening penalties, while projects that fail to complete the state audit can be denied grid connections.
Previously
Texas is moving to scrutinize data center development more closely after state officials identified unusually large electricity and water demands, extensive grid-connection requests, and significant public costs tied to tax incentives. Gov. Greg Abbott has directed state agencies to review proposed connections and project disclosures, while lawmakers consider changes to tax exemptions and local governments weigh moratoriums or stronger public participation. The central issue is whether new facilities can proceed without shifting grid, infrastructure, environmental, or community costs to Texas residents.
After Governor Greg Abbott ordered tighter enforcement, Texas Attorney General Ken Paxton began investigating data centers across 18 Texas counties for missing required water-use reports.
Texas Governor Greg Abbott recently paused state approvals for proposed data centers across Texas, while President Donald Trump criticized the action amid concerns over power, water, and grid reliability.
Texas Gov. Greg Abbott paused data-center grid approvals statewide, requiring audits after ERCOT projected more than 500% peak-demand growth and residents raised local impacts.
Texas Governor Greg Abbott paused approvals for proposed data centers seeking Texas grid connections while state regulators audit power, water, cooling, and community impacts.
Gov. Greg Abbott called to block new rural AI data centers in Texas on Tuesday in East Texas, citing resident cost impacts and local community concerns.
6/30/2026 • Community & Local Opposition • General
Texas Gov. Greg Abbott paused new data center approvals Monday statewide while officials audit proposed projects' power and water demands amid criticism from Donald Trump and local residents.
Rep. Veronica Escobar urged changes during June 4, 2026 House Appropriations markup after concerns about EPA pre-construction permitting for gas-generator data centers in El Paso.
Every Texan supports Gov. Greg Abbott's proposal to end Texas sales and use tax exemptions for qualifying data centers, citing revenue losses and electricity and water concerns.
7/27/2026 • Project Finance & Incentives • General
NetChoice told the Texas Senate Committee on Finance in an interim hearing that Texas should preserve sales-tax exemptions for data center equipment to sustain hyperscale investment and jobs.
7/27/2026 • Project Finance & Incentives • General
Gov. Greg Abbott ordered Texas PUC and ERCOT to consider new rules for AI data center expansions on July 30, citing local rural and residential impact concerns.
In Texas ahead of the November midterms, Gov. Greg Abbott and Rep. Gina Hinojosa campaign over proposed power, water, and tax rules for AI data centers amid rural opposition.
Gov. Greg Abbott in East Texas urged a rural Texas ban on new data centers as poll results and local city actions intensify opposition over power and water impacts.
Greg Abbott said Texas data centers must bring their own power and reuse water, with ERCOT required for grid connection, amid major AI investment announcements.
Texas Gov. Greg Abbott directed state regulators in June and August to audit data-center projects statewide and require developers to cover grid infrastructure costs.
Texas Governor Greg Abbott urged the Public Utilities Commission of Texas to protect residential ratepayers from data-center grid cost pass-through ahead of proposed 2027 legislation.
Texas Governor Greg Abbott directed PUCT and ERCOT in July 2020s planning to prevent data-center electric infrastructure costs from being passed to Texas residents.
Texas Governor Greg Abbott instituted a moratorium on new data center projects in Texas earlier this month, citing grid strain and insufficient community engagement.
8/24/2026 • Community & Local Opposition • General
Texas Governor Greg Abbott temporarily halted new data-center grid connections in Texas on Monday, requiring electricity and water disclosures because ERCOT is tracking sharply higher peak demand.
Texas Gov. Greg Abbott paused data center approvals statewide while agencies audit power, water, cooling, incentives, and community impacts amid ERCOT demand growth.
Texas Gov. Greg Abbott directed state regulators and ERCOT to review and potentially deny data-center grid connections across Texas amid unprecedented projected electricity demand.
Texas lawmakers are reviewing the state's data center sales tax exemption program in Austin after projected losses reached $3.3 billion and audits found noncompliance.
Texas lawmakers scheduled a Senate Finance Committee interim hearing in Austin to review data center sales tax exemptions projected to cost $3.3 billion in forgone revenue in 2028-29.
7/27/2026 • Project Finance & Incentives • General
Gov. Greg Abbott told a Bullard, Texas audience he wants a halt to rural data center builds, removal of tax incentives, and new rules for load-related cost burdens.
Texas Governor Greg Abbott said July campaign comments reflect a June 10 directive on AI data centers, targeting rural siting limits, electricity cost shielding, and annual water and power reporting.
Texas Governor Greg Abbott called for blocking new rural East Texas data center development while reiterating self-funded power, water reuse, setback, and tax-break elimination proposals.
Texas Gov. Greg Abbott proposed 2027 regulations directing PUC Texas and ERCOT to address taxpayer costs from data center growth, including closed-loop water and incentive repeal.
Greg Abbott proposed 2027 Texas data center rules requiring ERCOT interconnection cost responsibility, closed-loop water systems, and annual electricity and water reporting.
Governor Greg Abbott directed Texas PUC and ERCOT to require data centers to fully fund electric infrastructure serving their operations and to propose additional safeguards by July 17, 2026.
Texas Gov. Greg Abbott proposed new data-center regulations in 2026, directing PUC and ERCOT oversight and adding water-efficient technology requirements.
Texas Governor Greg Abbott called for 2027 legislative regulation of data centers, including closed-loop water, annual electricity and water reporting, and incentive reforms, addressed to PUCT and ERCOT.
Texas Governor Greg Abbott urged Texas regulators in June to restrict rural AI data center builds and require data centers to fund electricity infrastructure for grid load growth.
Texas Gov. Greg Abbott proposed statewide data center regulations in response to energy and water impacts and residential utility price concerns, including tax exemption repeal.
Texas voters opposing data center projects are considering Democratic candidates in November 2026, particularly around Temple, Killeen, Granbury, and surrounding communities.
8/24/2026 • Community & Local Opposition • General
Texas Gov. Greg Abbott ordered state regulators and ERCOT to review proposed data center grid connections statewide as artificial intelligence expansion increases electricity, water, and community concerns.
Texas Gov. Greg Abbott said the Texas Legislature will hold hearings this week on data-center financing and regulation, including tax exemptions, electricity costs, and water use.
Texas Gov. Greg Abbott said during an ABC News This Week interview that his administration would tighten AI data center oversight amid growing opposition in Texas communities.
8/23/2026 • Community & Local Opposition • General
Action Network urged Texans to challenge data center tax incentives as the Texas Senate Finance Committee reviews policies amid claimed water costs and annual sales tax losses.
7/29/2026 • Project Finance & Incentives • General
Texas Governor Greg Abbott called for rural data-center bans and reporting requirements during a Bullard campaign stop as San Marcos pursued a municipal ban under legal constraints.
Texas Governor Greg Abbott proposed rural restrictions and tax-break removal for new data centers while San Marcos and Hays County impose local actions amid water and cost concerns.
Greg Abbott announced a rural Texas ban proposal for AI data centers and tax-break elimination, with additional county-control legislation targeted for the 2027 session.
Texas Gov. Greg Abbott proposed in letters to the PUC and ERCOT oversight changes for data centers to require operator cost coverage, closed-loop cooling, and annual usage reporting.
Texas Governor Greg Abbott has tightened AI data center development standards in Texas after residents raised concerns about electricity demand, infrastructure costs, water, noise, and land use.
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