Abbott Widens Texas Data Center Freeze to Environmental Permits Pending ERCOT Audit
Texas Governor Greg Abbott ordered the state's environmental regulator to halt all data center-related permits, expanding an August moratorium on new grid connections while ERCOT audits its interconnection waitlist.
The directive extends a moratorium that Abbott's office imposed in August on new data center grid approvals — a step that had already halted new ERCOT interconnection requests — to environmental approvals issued by TCEQ. The commission is expected to tell the governor's office by Oct. 19 how it has complied.
Texas had been on track to surpass Virginia as the largest data center market in the world by the end of the decade, according to a February report from JLL cited by CNBC. Abbott's order may slow that buildout.
Data center construction has become a prominent issue in the 2026 midterm elections. An NBC News poll cited by CNBC found that 64% of Americans said they would be less likely to vote for a candidate who "supports building local data centers."
Abbott, who is running for a fourth term against state Representative Gina Hinojosa in what CNBC described as a tight race, has been at the center of the dispute. In 2025 he said Texas would become the "epicenter of AI development," citing sales tax exemptions for qualifying data centers and high-profile projects such as OpenAI's Stargate. He has since reversed that position.
The press release announcing the moratorium said: "Next session, Governor Abbott will work with the Legislature to eliminate any financial incentives for data centers."