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Abbott recommends sweeping data center regulation, including eliminating sales tax exemption

Abbott wants regulators to make data centers pay infrastructure costs and curb water use, while state officials cite 439 gigawatts of requested grid capacity.

  • On Wednesday, Governor Greg Abbott directed the Public Utility Commission and Electric Reliability Council of Texas to force data centers to pay for their own infrastructure, protecting residential electric bills from industry expansion.
  • Driven by reports of data centers straining resources, the state has seen rising opposition from residents across Texas. ERCOT reported 439 gigawatts of power capacity requests, five times the all-time peak demand.
  • Mandates include reducing residential transmission costs by July 31, while Abbott plans future legislation repealing outdated tax incentives for these facilities.
  • The Data Center Coalition stated it "looks forward to working with the governor and state regulators," noting member companies already deploy advanced cooling technologies and consult with local communities.
  • Lawmakers will study data center water usage during a June 23 hearing as Abbott prepares to codify these regulatory actions during the 2027 legislative session.
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The Huntsville Item broke the news on Wednesday, June 10, 2026.
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