Governor Greg Abbott has frozen state permits for new data centers statewide, citing concerns over their potential strain on Texas' electricity grid and local water resources. The moratorium, enacted earlier this month, requires new facilities to demonstrate they can provide their own power and drive down utility costs for area residents, while also granting local communities more authority over where these centers can build.
This statewide halt impacts projects such as the AmpZ and Hyper Data Grid AI data centers, which are currently targeting Angelina County. State permits for these facilities remain on hold under the new directive.
Speaking in Hemphill, Governor Abbott drew a clear line on energy consumption, stating that new facilities "must provide their own power" instead of drawing from the Texas power grid. He further stipulated that these facilities must demonstrate they will reduce utility costs for neighboring residents. This reduction, Abbott explained, would occur through "firm purchase agreements for buying a certain amount of electricity," which ensures that the additional supply on the marketplace helps lower overall electricity rates.
Beyond energy, Abbott also emphasized the need for cities and counties to have greater control over the siting of these large-scale facilities, a power local leaders currently lack. Without tax abatement agreements, county leaders hold no sway over land use decisions for data centers. This regulatory gap prompted officials, including Angelina County Judge Keith Wright, along with the Lufkin City Council, to lobby state lawmakers for increased oversight. Wright articulated the local perspective, stating that without abatement agreements, local leaders have "zero control." Governor Abbott affirmed his support for this shift, indicating that local communities should possess "the authority and the independence to make their own decision" about data centers.
Addressing another critical resource, Abbott noted that the state Legislature and the Texas Water Development Board are in the process of drafting new rules designed to prevent data centers from depleting local water supplies. These proposed changes are expected to be considered during the Texas Legislature’s next regular session, which is scheduled to begin on January 12, 2027. The current moratorium is designed to allow the state to assess the resource demands of such developments and ensure local interests are protected as technology infrastructure expands across East Texas and the wider state.
