Texas Governor-Elect Pledges Moratorium On New Data Center Approvals

Texas governor-elect Gina Hinojosa has pledged to halt new data center approvals until state lawmakers pass new rules, after winning the Nov. 3 election. The position, set out on her campaign sFeatured: Sprawling hyperscale data center facility illustrating the large-scale campus developments impacted by the Texas approval moratorium.ite, goes beyond the permitting freeze that outgoing Republican Governor Greg Abbott imposed this year.

Hinojosa wants an immediate moratorium on data center approvals to last until the Legislature can meet and pass what she calls real protections for communities. Her Texans First Data Center Priorities would require operators to hire union workers, bar them from using nondisclosure agreements, and make them show that households would not pay more for electricity or water. The plan would also end subsidies and void any water contract with a data center that threatens a community's water supply, according to Data Center Dynamics. It would give local communities the right to vote on data center projects.

Governor Greg Abbott began restricting the sector in August. On Aug. 3 he directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas to audit every data center in the ERCOT interconnection queue. Abbott's office said ERCOT is weighing more than 474 GW of connection requests, more than five times the state's record peak demand, and that about 90 percent of those requests are data centers. On Sept. 21 Abbott told the Texas Commission on Environmental Quality to pause data center permits until the audit ends.

Hinojosa has called Abbott's temporary freeze a scam, saying the governor would likely lift it right after the election. "We can have economic development and we can have protections for Texans. These things are not mutually exclusive," she said in a September interview with Politico, The Texas Tribune reported.

The pledge unsettles a state that accounts for about 25 percent of planned US data center capacity, according to a Goldman Sachs note cited by Reuters. The Data Center Coalition said the industry can keep creating jobs and tax revenue in Texas. "The data center industry is committed to advancing America's digital infrastructure, including here in the Lone Star State," said Jess Heck, the group's director of government affairs in Texas.

Hinojosa campaigned against specific projects, holding a press conference in Red Oak, about 12 miles south of downtown Dallas, where Diode Ventures plans the 900 MW Weston Holladay Technology Park. After community opposition, Diode withdrew a separate proposal near Cedar Creek Lake in Henderson County in July.

Baxtel tracks 807 data center facilities in Texas, operated by 187 providers. The largest is IREN's Childress site at 200 MW.

The ERCOT audit is expected to conclude in December, and the Texas Legislature meets in January, before Hinojosa takes office on Jan. 19.

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