Hinojosa to Halt Data Center Approvals Pending New Texas Laws
The governor-elect plans a moratorium until the January legislative session, citing community concerns over water use and power costs.
By Renata Mehta ·
Democratic candidate Gina Hinojosa won the Texas governor's race Tuesday, setting the stage for a new regulatory framework for the state's data centers. Her victory allows her to extend a pause on project approvals that began under her predecessor. Hinojosa intends to keep these halts in place until the Texas Legislature convenes in January to draft new state laws.
The incoming governor plans to issue a formal moratorium on all data center approvals. She stated this goal in an October 22 video posted to X. Hinojosa described the pause as a ban designed to protect Texans. She wants lawmakers to pass protections that give residents a voice in deciding where and how these facilities are built.
Grassroots opposition has driven this policy shift. Communities across the state have raised concerns about the massive power demands of data centers and their unknown water requirements. Texas faces serious drought issues, making water usage a primary concern for critics. The opposition spans the political spectrum, with residents in both red and blue districts expressing frustration.
Hinojosa outlined specific priorities for the upcoming legislative session. She proposes requiring data center operators to hire union workers and protecting local water supplies. Her plan also includes stopping the use of nondisclosure agreements that obscure project details from the public. She aims to ensure residents do not face higher electricity bills due to these facilities and to end tax subsidies that cost the state billions in sales tax revenue.
Her predecessor, Gov. Greg Abbott, initially promoted Texas as a hub for artificial intelligence. However, he shifted his stance in August, issuing pauses on environmental permitting and grid connections. These pauses allowed regulators to audit facility data, a process expected to finish in December. Abbott sought information on tax incentives, water use, and noise pollution. He also demanded that data centers pay for their own electrical infrastructure.
Despite the previous administration's efforts, some permits were approved during the pause. Environmental advocates identified these approvals, forcing the permitting agency to shut down its online filing system. Kathryn Guerra, a campaign director for Public Citizen, noted that the election result reflects real anger in communities. She said the state is now in a position to listen to Texans who have raised concerns over the past year.
The data center industry has responded to the change in leadership. Jess Heck, director of government affairs in Texas for the Data Center Coalition, said the industry remains committed to building digital infrastructure. The coalition plans to work with state and local officials to support responsible growth. Elon Musk, who supported Abbott, posted on social media that data centers in space appear appealing.
