Governor-elect Gina Hinojosa to Freeze Texas Data Center Approvals
Governor-elect Gina Hinojosa will extend the pause on new data center approvals and freeze electricity rates upon taking office on January 17.
Texas Governor-elect Gina Hinojosa plans to extend and harden a state-wide pause on new AI and data center approvals when she takes office on January 17. This action builds upon a September suspension of environmental permits and grid connections initiated by Governor Greg Abbott pending an audit. Hinojosa stated that construction must remain paused until legislation is passed to protect residents, particularly in rural communities where she claims unregulated expansion has left Texans vulnerable.
On her first day in office, Hinojosa intends to issue an emergency executive order to freeze electricity rates. These policies create significant headwinds for energy providers and data center REITs with heavy Texas exposure, including Vistra Corp, Digital Realty Trust, IREN, Core Scientific, and Cipher Digital. The market reacted to the Democratic flip of the governorship and the moratorium with a 12% plunge in the Philadelphia semiconductor index ETF (SOXX) on Thursday.
Beyond infrastructure, Hinojosa announced she will block the sale of 1,300 acres of public land in South Texas, including Boca Chica State Park, to Space Exploration Technologies Corp. She asserted that the state's relationship with Elon Musk's companies must be conducted on the terms of the state.
