Data centers in Texas prove a key topic months away from midterm elections

As the public backlash to data center construction continues in both suburban and rural parts of Texas, Gov. Greg Abbott is touting that major tech companies like Google, Amazon and Microsoft are signing on to guidelines he has implemented to "ensure data center development does not come at the expense of Texas families or communities."

The guidelines include undergoing audits from ERCOT and the Public Utility Commission of Texas over electricity use, water consumption, noise and light pollution and other impacts on nearby property owners. Abbott says data center projects that do not comply with the audits will not be approved.

A recent poll by Texas Public Opinion Research shows more than 75 percent of Texans support requiring large AI data centers to disclose water consumption, avoid tapping overused aquifers, fund conservation projects, fund their own grid upgrades, and not pass the costs onto other electricity ratepayers.

State Rep. Vikki Goodwin, a Democrat from Austin and the party's nominee for lieutenant governor, spoke with Eye On Politics about the issue and said Abbott should call a special session.

"I would like to have that put into law. Right now, it's just the governor asking for those things to happen, and what's the enforcement? We need to have the legislature back that up by, again, having a special session, putting this into law, making sure there's some way to enforce what the governor is asking for," Goodwin said.

She also said that Texas should eliminate tax incentives for data centers.

"These companies should stand on their own at this point in time. We see an explosive growth of the data centers, and there's some thought ... we're overbuilding. And so, the concern about if some of them are built and aren't used. Ten years down the road, is this going to become kind of like our orphan well situation, where the companies leave or potentially go bankrupt, and we're left, the citizens of the state, to clean up the mess?" she said.

"There's also just a huge, vast amounts of water and energy, and there's real concern about how ERCOT will be able to handle this. Our grid has a capacity, and the amount of energy needed for these new data centers far exceeds the capacity that we currently have. Of course, some of the data centers are bringing in their own energy, building gas-powered plants on-site, or using generators, but we don't have a handle on how much emissions they are producing. And is that being regulated by the Railroad Commission, or is anyone paying attention to that?" Goodwin said.

Republican Rep. Pat Fallon, whose district stretches from Collin County to East Texas, told Eye On Politics that he supports Abbott's plan and said the state needs to listen to residents' concerns.

"I share the concerns that a lot of our constituents have. And you have to do data centers like anything else, smartly," Fallon said. "If you do a data center where the local population has bought in, the local government has bought in and local leaders, and I don't think you really have much of an issue. But when there are concerns, and rightfully so, about noise, about property devaluation, they also want to make sure that you're not taking precious water resources, and you don't want to see your electric bill being  increased because there's a giant data center maybe a mile down the street."

"The fact of the matter is, with AI and quantum and us competing with China, this is something that we're going to have to deal with in the future. I think in New York State did a complete moratorium where they said there's just not going to be data centers in New York. Well, what if some of those local communities actually wanted them because it was going to create jobs and opportunity and maybe even decrease their electric bills? Again, if done correctly. So I think that was not the smart way to do it, because that's exactly what China wants. They don't want to see data centers in the United States," Fallon said.

For his part, President Trump described Abbott's stance on data centers as a mistake in an interview with Punchbowl News earlier this month. Mr. Trump said data centers could be "bigger than oil."