Texas Cities and Counties Fight Data Center Expansion

A growing movement against data center expansion has emerged across Texas, with a University of Texas poll finding that 56% of Texans oppose the facilities in their neighborhoods. Concerns center on the massive consumption of water and electricity, which critics argue could destabilize the electrical grid and deplete aquifers.

San Marcos became the first Texas city to ban data centers via a 4-3 City Council vote to amend zoning laws. This action faces a legal challenge from State Senator Paul Bettencourt, who argues that municipal bans violate state guidelines. Similarly, Hill County was forced to rescind a one-year construction moratorium after the developer RCM Hill filed a $100 million lawsuit.

Governor Greg Abbott has responded to the tension by ordering the Public Utility Commission to ensure new data centers reduce residential electricity bills and requiring companies to fund their own electric infrastructure. Abbott has also proposed regulations for the 2027 legislative session, including mandatory water-efficient technologies and the repeal of sales tax exemptions. While some state representatives advocate for local control and temporary moratoriums to conduct impact studies, others push for statewide, top-down guidelines to prevent a fragmented regulatory landscape.