2 days ago
21
Texas is shifting from courting data centers toward regulating them.
Gov. Greg Abbott has proposed new rules for data centers as concerns about their energy and water consumption and their impact on utility prices spur complaints in communities across the US.
"The rapid scale of data center development requires oversight to ensure everyday Texans are not burdened with the costs of infrastructure driven by data center expansion," Abbott, a Republican, wrote in a letter to state regulators on Wednesday.
Abbott said he would work with the state legislature to pass a number of measures, including requiring data centers to pay for their own electric infrastructure, requiring new data centers to use water-efficient technology, and repealing sales tax exemptions for data centers.
The letter also directs state regulators to start working to ensure data centers pay for their own electric infrastructure, ensure data center interconnections result in lower residential electricity bills, and use their power to protect Texas residents.
The proposed regulations are notable in a pro-business state that hosts data centers owned by Big Tech companies from Tesla to Meta to Amazon. Texas has the second-most data centers of any state, behind only Virginia.
BYOE — Bring Your Own Electricity
Backlash to data center development has grown across the US, with protests in local communities and proposed statewide bans in at least 12 states.
Gabriel Collins, an energy and environmental regulatory affairs fellow at Rice University's Baker Institute, said the proposed regulations in Texas are unlike efforts to pause data center development in other states.
Williams said the message he thinks Abbott is trying to send is "Texas is open for business, but be ready to bring your own electricity and be prepared to invest in local water systems."
"They want to make sure that the companies with the big balance sheets bear the significant share of whatever the impacts may be," he said.
Collins also said the issue of addressing data centers is largely bipartisan, a relative rarity in Texas, which could partly explain why Abbott is signaling state lawmakers to focus on it, adding there's a pretty good shot they can get "reasonable guardrails" passed.
Texas approved a statewide sales tax break for data centers back in 2013. The Texas Tribune reported that the state gives data centers over $1 billion in tax breaks every year.
In November, Abbott called Texas "the epicenter of AI development" during a joint announcement with Google of a $40 billion investment in the state, which included new data centers.
Read next
Kelsey is a senior reporter for Business Insider, where she covers business and tech news as well as stories about travel, luxury, and consulting.Her feature story "Disaster at 18,200 feet" received awards from the New York Press Club and the North American Travel Journalists Association, as well as honorable mention from the Society of American Travel Writers. It was also included on Longreads' and Pocket's best of 2022 lists. She has also received an American Journalism Online Award for her coverage on missing and murdered Indigenous people in Wyoming.She's appeared on CBS, NPR, NBC, and other outlets to discuss her work. She previously worked on the world news desk at the BBC in London and received a master's in journalism from Northwestern University.She can be reached by email at kvlamis@businessinsider.com or via the encrypted-messaging app Signal @kelseyv.21.Popular storiesDisaster on Denali: Inside a 1,000-foot fall on America's highest peakThrifting is more popular than ever. It's also never been worse.Rolex wouldn't service the vintage watch my mom inherited. Watchmakers say it happens all the time.A tiny, invasive bug and the climate crisis are changing how guitars are made, and shifting the course of music historyThe tourism free-for-all is overGovernment-run boarding schools were founded to 'civilize' Native Americans. Hundreds of dead children remain buried in the schoolyard graves.Meet the Texas minister who helps fly dozens of women to New Mexico every month to get abortionsPeople are flocking to Colorado for the great outdoors, but the air pollution is so bad, it's forcing many to stay insideInside Kabul: An aid worker reveals the devastating chaos that erupted during the US exit from Afghanistan
