Texas Governor Greg Abbott Blocks Diode Ventures Data Center

The Kansas-based developer Diode Ventures withdrew plans to build a data center near Cedar Creek Lake in Henderson County after the project failed to meet state energy and infrastructure standards. The project was scrapped following directives issued by Governor Greg Abbott on June 10 to the Public Utilities Commission and the Electric Reliability Council of Texas.

Abbott's standards required that data centers utilize water-efficient technologies, such as closed-loop cooling, and implement noise-reduction and setback measures to protect local communities. To avoid burdening ratepayers, the governor mandated that developers cover all electric infrastructure costs, increase overall electric capacity, and ensure the projects lead to reduced residential electrical bills.

Following the withdrawal of the project, the Office of the Governor announced that Texas will pursue legislation to codify these requirements. The proposed laws would introduce new mandates for annual electricity and water usage reporting and repeal certain sales tax exemptions and incentives previously available to data center developers.