Governor Refuses to Call Special Session
on Data Centers as Agencies Tackle Issue
Capitol Inside
July 24, 2026
Governor Greg Abbott spurned calls from Democrats for a special session on data center regulations on Friday when he turned the task over to a pair of state agencies he controls on an issue that has the state's top leader and Republicans in competitive down-ballot Texas races on the brink of panic.
Abbott unveiled a list of actions that he's instructed the Public Utility Commission and state power grid officials at ERCOT to undertake to ensure that Texas consumers aren't forced to subsidize the rapidly-expanding data center industry that the governor and GOP allies in Austin embraced and encouraged in recent years until now.
"Residential ratepayers will not foot the bill for this industry's growth. These actions keep electric bills affordable and protest the water our communities need," Abbott said in a post on X.
Austin State Rep. Gina Hinojosa - the Democratic nominee for governor this fall - implored the governor on Thursday to impose a statewide moratorium on new data centers that would remain in place until the Texas Legislature has a shot to tackle the explosive issue in a special session. .
"Greg Abbott started the data center madness in Texas. He has the power to stop it TODAY," Hinojosa said on social media.
Democratic U.S. Senate contender James Talarico - a state representative from the Capitol City as well - rolled out a data center proposal this week that seeks a balance between investment in the industry and more extensive state oversight.
Abbott had called for a similar approach in the face of mounting criticism over the rapid proliferation of the data center industry and the massive drain on natural resources that's accompanied. The governor declared in June that new data centers would have to provide their own water and electricity before they'd be allowed to build new facilities here.
After ignoring the problem for years, Abbott finds himself walking a tight rope on the issue now in light of the fact that President Donald Trump has been the industry's biggest promoter. The governor and the Republicans in Austin have given the Democrats a weapon of potential mass destruction to use against the Texas ruling party's members in general election fights in an election year when affordability is one of the top two issues along with Trump's war in Iran that's fueling record gasoline prices across the U.S. Some of the governor's biggest donors have cashed in on the data center boom here.
Talarico has seized on the furor in a battle with Republican Attorney General Ken Paxton in an open U.S. Senate contest here.
“We’ve gotta stop these data centers from jacking up our utility bills, we gotta stop them from using up our water, and we have to stop corrupt politicians from giving sweetheart tax deals to giant AI companies. If these corporations can’t meet the demands of the people, then they shouldn’t build data centers in our communities,” Talarico said.
Abbott said the PUC and ERCOT have taken the following actions to address the problem.
* Requiring data centers to not only pay for transmission infrastructure built to serve them but contribute toward meaningfully reducing residential electric bills.
* Adopting rules to prevent large data centers from diverting existing power away from the ERCOT grid and ensuring power is prioritized for Texas families and communities.
*Begun sweeping changes to how data centers pay for the infrastructure needed to serve them, ensuring data centers do not shift those costs onto everyday Texans or place unnecessary strain on our state's resources.
* Implemented a new interconnection screening process to prevent data centers from overburdening the grid.
* Strengthened ERCOT’s process for evaluating and managing data center development, and improved long-term planning to ensure our infrastructure will reliably serve Texas residents.
* Developing stronger standards that data centers must meet before they can connect to the grid.
* Mandate that new data centers reduce their power quickly when ERCOT instructs them.
more to come ..
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