Texas Governor Halts Data Center Environmental Permitting

Texas Gov. Greg Abbott on September 21, 2026, issued a directive to the Executive Director of the Texas Commission on Environmental Quality to "pause the issuance of all permits related to data center projects until ERCOT [Electric Reliability Council of Texas] completes its review." The "review" at issue is the Abbott-directed, comprehensive audit of data centers projects seeking to interconnect to the Texas electric grid he announced six weeks ago on August 3, 2026.

This is the latest move in the governor's tactical posture of tightening the regulatory constraints on the rapid data center development in Texas.

As Holland & Knight has previously reported, Gov. Abbott's response comes as the dramatic increase in data center development in rural Texas impacts nearby residents, an important constituency in a midterm election cycle. The Texas Legislature has largely followed the governor's lead, with a number of Texas House and Senate committees studying the issue and signaling major changes ahead in the coming legislative session in January 2027.

Considerations for Industry Stakeholders

Recognizing the rapidly shifting political and regulatory environment facing the industry, Holland & Knight's Texas Government Advocacy Team has established the Texas Data Center Association, a trade association dedicated to effectively representing the industry before Texas policymakers and helping ensure that data center companies have a coordinated voice in the debates already underway.

Clients and other stakeholders with current or planned Texas data center interests should engage now. For guidance regarding potential legislative, regulatory or public affairs impacts, or to discuss participation in the Texas Data Center Association, please contact the authors.

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