Texas Gov. Greg Abbott has directed the Texas Commission on Environmental Quality (TCEQ) to stop issuing permits for data center projects until the Electric Reliability Council of Texas (ERCOT) completes its review. In a Sept. 21, 2026 letter to TCEQ Executive Director Kelly Keel, Abbott wrote: "With this letter I am directing the Texas Commission on Environmental Quality (TCEQ) to halt all permits sought by data centers." Two related deadlines have since passed. Data center developers' notarized responses to an ERCOT information request were due Oct. 12, and TCEQ's update to the governor's office on its compliance was due Oct. 19.

What the letter orders

The letter goes beyond TCEQ. Abbott wrote that "no other state agency shall move forward with regulatory approvals related to data centers until this information is acquired." That refers to information sought by the Public Utility Commission of Texas (PUC), ERCOT and the Texas Water Development Board (TWDB). He continued: "Therefore, I direct the TCEQ to pause the issuance of all permits related to data center projects until ERCOT completes its review."

The letter also sets conditions for data center projects. They "must cover all electrical infrastructure costs, result in lower residential electrical bills, and complete the ERCOT and TWDB audits." Under the letter, data centers also must not use water needed by local communities, must report electricity and water usage, and must abide by setback requirements. On state incentives, Abbott wrote: "I will work with the Legislature to eliminate any financial incentives for data centers."

The final instruction set a date: "TCEQ shall provide an update to my office on its compliance with my directive by Monday, October 19, 2026." That date passed one day ago.

BIC Magazine covered the directive on Sept. 22 and quoted Abbott: "Simply put, Texans must come first," and "Until they do, TCEQ will issue no permits sought by data center projects."

The ERCOT information request

On Sept. 14, ERCOT issued its State and Community Impact Request for Information under Market Notice M-B091426-01. The request applies to two groups:

  • Large load entities whose data centers were conditionally classified as base load or studied load in Batch Zero and have not been energized at 60 kV or above.
  • Developers of proposed data centers with a peak requested load of at least 25 MW but under 75 MW that were reported in ERCOT's Aug. 19 Medium Load RFI, classified as "Substantiated Load," and not yet energized.

The request asks about public financial assistance, grid power dependency, water sources and consumption, cooling technologies, noise, light, traffic and ownership. ERCOT says it developed the water section, Section C, with the PUC and TWDB. Responses had to include a notarized attestation from the developer and were due by 5 p.m. Central Prevailing Time on Oct. 12, 2026. That deadline passed eight days ago.

The notice also lists consequences. ERCOT says any failure to respond, in whole or in part, will be reported to the PUC and the Office of the Governor. It also warns that failing to fully answer the Section C water questions may lead to criminal penalties under Texas Water Code 16.012.

How the directives built up

The TCEQ letter is the latest in a series of actions by the governor. Law firm Greenberg Traurig lists them in this order:

  • June 10, 2026: The PUC and ERCOT were directed to review data centers' impact on electric infrastructure and residential ratepayers.
  • Aug. 3, 2026: Batch Zero large-load interconnections were paused.
  • Sept. 14, 2026: TWDB was directed to enforce water-use reporting requirements and to audit data center water consumption in coordination with ERCOT. ERCOT issued its State and Community Impact RFI the same day.
  • Sept. 21, 2026: TCEQ was directed to halt data center permits.

Greenberg Traurig says the permit halt has no fixed end date and lasts until the audits are complete and subsequent agency action occurs. The firm also says the governor directed the PUC to require data centers to fully fund the electric infrastructure they need, so those costs are not passed to residential customers.

What Happens Next

  • ERCOT and PUC report: ERCOT says it expects to publish a report with the PUC on the State and Community Impact RFI no later than Dec. 10, 2026.
  • Legislative session: The 90th Texas Legislature convenes Jan. 12, 2027, according to Greenberg Traurig, which says the governor intends to work with lawmakers to codify the measures. Potential initiatives the firm lists include phasing out certain data center tax incentives, requiring water-efficient cooling, mandating electricity and water usage reporting, and setting setback and noise-mitigation requirements.
  • End of the halt: The letter ties the TCEQ pause to the completion of ERCOT's review and sets no calendar date.

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