Texas has directed the Texas Commission on Environmental Quality (TCEQ) to stop issuing permits sought by data center projects while state agencies review their electricity and water demands. The directive extends an earlier pause on approvals for data centers seeking to connect to the state’s electric grid. It also affects projects that plan to generate their own power.
The Public Utility Commission of Texas and ERCOT began reviewing proposed data centers in August. Their audit seeks information on power use, generation plans, infrastructure costs, ownership, tax incentives, and effects on nearby communities. The Texas Water Development Board is working with ERCOT to assess water use and supply. State agencies must obtain that information before they advance regulatory approvals for data center development.
TCEQ must use the audit findings when it considers future permit applications. The agency must report on its compliance with the directive by October 19, 2026.