The governor ordered Texas environmental regulators to stop approving data center permits until state officials finish reviewing the industry’s demands on the electric grid, water supplies and local communities.
AUSTIN, Texas — Gov. Greg Abbott ordered Texas environmental regulators Monday to halt permitting for data center projects, significantly expanding a state crackdown on the rapidly growing industry.
Abbott directed the Texas Commission on Environmental Quality to issue no permits sought by data centers until an ongoing audit by state electric and water regulators is completed.
“Data centers must pay their own way, protect our grid and water, and complete the ERCOT and TWDB audits,” Abbott said in announcing the directive. “Until they do, TCEQ will issue no permits sought by data center projects.”
The move represents the latest—and broadest—step in a series of actions Abbott has taken this summer to slow data center development while state officials determine how hundreds of proposed facilities could affect Texas infrastructure.
For communities such as Temple, where billions of dollars in data center development are already planned or under construction, the immediate impact will depend heavily on which state approvals individual projects have already secured.
A widening state crackdown
Texas has spent years attracting data centers through relatively inexpensive electricity, available land and tax incentives.
Artificial intelligence has accelerated that growth.
By August, the Electric Reliability Council of Texas was tracking more than 474 gigawatts of large-load requests seeking connection to the Texas grid—more than five times the state’s record peak electricity demand. Many of those proposed projects are not expected to ultimately be built, but the sheer volume has made it difficult for grid planners to determine how much future electricity Texas actually needs.
ERCOT responded earlier this year with a new system called Batch Zero, grouping large power users together so the grid operator could study their combined effect rather than evaluating each project individually. The Public Utility Commission approved the process in June.
Then Abbott intervened.
On Aug. 3, he ordered ERCOT and the Public Utility Commission to conduct a more extensive audit before allowing data center projects to advance through the interconnection process. ERCOT subsequently delayed portions of Batch Zero and began issuing detailed verification requests to developers.
The audit examines electricity demand, on-site power generation, water consumption, cooling methods, public incentives, community impacts and ownership information.
The research reviewed by The Directory shows how the state’s approach has progressively moved from managing grid connections to examining the broader environmental footprint of the industry.
Water became the next issue
Abbott expanded the effort again last week.
On Sept. 14, he directed the Texas Water Development Board to enforce existing water-use reporting requirements against data centers and other large water users.
State records showed that fewer than one-third of data centers surveyed in 2025 returned the required water-use report. The governor ordered the water board to pursue existing legal penalties for noncompliance and coordinate with ERCOT’s broader audit.
That matters because water is increasingly part of the data center debate.
Some facilities can consume substantial amounts of water for cooling, although the amount varies dramatically depending on facility design and cooling technology.
Abbott has said data centers should not consume water needed by surrounding communities and should disclose both their expected consumption and where that water will come from.
Monday’s order effectively ties those questions directly to the permitting process.
Abbott instructed TCEQ to align its decisions with the ERCOT and water-board audits and told the agency to report back to his office by Oct. 19.
Closing the off-grid route
The TCEQ order also reaches projects that might otherwise avoid ERCOT’s immediate interconnection restrictions.
Some developers have proposed building their own natural gas generation—or other “behind-the-meter” power systems—so a data center can produce much of its electricity on site instead of waiting years for sufficient grid capacity.
Those power facilities can still require state environmental permits.
By directing TCEQ to stop approvals, Abbott has extended the pause beyond projects simply waiting for ERCOT electricity.
The Texas Tribune reported Monday that the expanded order appears designed in part to prevent developers from bypassing the grid audit by constructing private generation.
That makes Monday’s action considerably broader than the original August pause.
What does this mean for Temple?
Temple has become one of Central Texas’ most significant data center development sites.
Rowan Digital Infrastructure says six buildings are approved, proposed or under construction across its Temple portfolio, representing several billion dollars in planned private investment. Its original 300-megawatt Project Temple campus began construction earlier this year.
Rowan has also publicly agreed to comply with Abbott’s data center standards. The governor specifically named Rowan, Google and CleanSpark in August as companies that had committed to meeting his requirements.
At least some environmental authorizations have already been obtained.
TCEQ records show Rowan Stampede LLC submitted an emissions certification for its Stampede Data Center in Temple that the state acknowledged in June.
That means Monday’s announcement should not automatically be read as a stop-work order for every data center already under construction in Temple.
The governor’s directive concerns permits and regulatory approvals that have not yet moved forward.
Exactly how the order applies to individual Rowan phases—including projects with some approvals complete but additional state permits still outstanding—will require project-by-project review.
The Directory is seeking clarification on the local impact.
Texas may go further
Abbott also announced Monday that he intends to work with lawmakers during the 2027 legislative session to eliminate financial incentives for data centers.
That would represent another major shift for a state that previously used tax policy and its business-friendly reputation to attract the industry.
The governor’s current position is that data centers should pay the full cost of infrastructure required to serve them, protect water supplies, limit impacts on neighboring communities and avoid shifting costs onto residential electricity customers.
What remains unclear is how long the current permitting halt will last.
ERCOT has previously said portions of its verification work could take several months. State officials are reviewing hundreds of projects representing far more proposed electricity demand than could realistically be accommodated at once.
The result is a sudden change in the operating environment for one of Texas’ fastest-growing industries.
Only months ago, the central question was how quickly the state could build enough electricity infrastructure to accommodate the AI boom.
Now Texas is asking a different question:
How much data center development can its grid, water supplies and communities actually support?
The Directory will continue updating this story as additional information becomes available about the effect on Temple-area projects.