TEXAS — State law requires data centers to report their power and water usage, but less than 10% of data centers were in compliance.
Gov. Greg Abbott’s new audit requirement directs the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) to gather information on which data centers use state financial assistance. The audit will also investigate how the centers provide their own power or if they depend on the state’s grid, the water usage of the data centers and the impact they have on nearby communities.
Kirk Offel, whose company provides a workforce for data centers, applauds the governor’s directive.
“What he’s trying to do is try to get the speculative deals out of the way and get the real builder, owner, operator, developers that have been doing this to continue building these things,” said Offel, the founder and CEO of Overwatch Mission Critical. “We want to just separate the speculative groups from the ones that are real characters.”
Large companies like Oracle, OpenAI and Google are already moving in the direction Abbott prefers. A Google spokesperson said, “We share Abbott’s commitment to ensure data centers are developed the right way and support high standards for data center providers.”
“With billions of dollars in investment and hundreds of thousands of jobs on the line, we urge the PUCT and ERCOT to move swiftly in order to distinguish between speculative projects and serious, committed investors and community partners,” the Data Center Coalition told Capital Tonight.
But President Donald Trump is calling Abbott’s latest move a mistake.
“There are other communities that want it. When a community wants it, it means a lot of money is going to come into that community,” Trump said in an interview with Punchbowl News.
Abbott’s press secretary responded to Trump’s critique, saying that this audit will help control electricity demand, adding, “The Governor’s pause requires data centers to provide PUCT and ERCOT with the required information for them to make fully informed decisions. Simply put, Texans must come first.”
“President Trump has a requirement to push America to the front and keep that lead and advantage. But the governor of Texas also has a responsibility and a duty to the Texans, and that is to make sure that what we’re building is sustainable and it’s safe and it’s good for Texans,” said Offel.
Democrats are skeptical, with state Rep. Erin Zwiener, D-Driftwood, describing Abbott’s order as a delay to earn him favor with voters this election cycle.
“The governor looking up, smelling the polling and trying to cover up the fact that the reason we have so many data centers moving here is because he opened the doors and invited them in,” said Zwiener.
She adds that there is an appetite in the Legislature to further address the issue, but her priority is on local control.
“I hear from data center operators all the time that they’re going to work with local communities, that they’re going to invest, that they’re going to make it work, and I say, okay, then let those communities say no,” said Zwiener.
Abbott has released his data center specific priorities ahead of session that focus on ensuring “that growth strengthens our people and their quality of life without placing undue burdens on Texans and local communities.”