Updated 3 p.m. Aug. 19
San Marcos City Council Member Amanda Rodriquez told lawmakers that officials in her community need to have a larger role in data center development. She said San Marcos officials have received limited information from data center developers looking to build in the area.
“The data center we’re talking about was 200 acres, and we had our utility director come and tell us that that one data center was expected to use three times the amount of electricity of the entirety of our city. We are a city of less than 90,000 people,” Rodriguez said Aug. 19. “The question is always going to be who pays for this infrastructure as we continue to grow.”
After hearing from elected officials from several Texas communities, committee chair Rep. Ken King, R-Canadian, ended public and invited testimony on data centers after six hours, noting that Texans who signed up to testify and were unable to do so could submit online public comments until 5 p.m. Aug. 21.
“I don’t want anybody to think this is our last time that we’re going to talk about data centers, or that you’re not going to get another opportunity to talk about data centers, but 765-kV lines are also very, very important, and we need to move on to that discussion,” King said.
Updated 12 p.m. Aug. 19
During over an hour of testimony and discussion with lawmakers, data center industry representatives emphasized that they wanted to be “teammates and partners” to residents of the communities they build in.
Haynes Strader, chief development officer for Skybox Data Centers, said the company has taken a “community-first approach” on existing or in-progress data centers in Dallas, Hutto, Katy, Lancaster, Pflugerville and Wichita Falls.
“In Round Rock, where we faced some local opposition recently, we had a website, an email address and a phone number,” Strader said Aug. 19. “We fielded over 370 phone calls with local residents to appease concerns and have worked very closely in every community we've been in to make sure we understand what the concerns are and where we can help.”
Round Rock City Council unanimously approved a rezoning request for a Skybox data center in February, Community Impact reported.
“Our projects represent over $5 billion of investment in the state, and that does not include tenants and small equipment—that is just the real estate,” Strader told lawmakers. “That money goes straight to the local community, where they can choose to spend it on schools, roads [or] infrastructure.”
Jess Heck, the Texas director of government affairs for the Data Center Coalition, an industry advocacy group, said data center growth in the state is driven by Texas’ business-friendly policies and “robust energy resources.”
Data center developers also lauded Abbott’s order that all proposed data centers be audited before they can connect to the ERCOT grid. Strader said grid officials have “done a phenomenal job” preparing for the audit.
“I do think there have been a lot of bad actors in this space that have clogged up our system as it relates to the [grid connection] queue, as it relates to the availability of energy and resources,” he said. “It will be clear who is a good actor and who is not. The folks sitting here before you today at this table, I can attest to—I've worked with each of them in different capacities—these are good developers.”
Pointing to resident concerns about noise, congestion, water shortages and strain on the power grid, some legislators questioned which companies were the “bad actors.”
“I’ve never heard someone come before this committee and say that they're the bad actors,” said Rep. Rafael Anchía, D-Dallas. “Everybody says, ‘We're the good guys. It's all those other people.’”
Updated 11:15 a.m. Aug. 19
During the public testimony segments of the hearing, some Texans expressed concerns that data center development is happening too quickly and communities do not have enough say in that growth.
Taylor resident Susan Ross said a 665-acre data center campus, known as Project Mustang, was being proposed next to her house.
“I get it, it's progress, but we just found out on Aug. 3 that they were proposing to put this data center across the street from us,” Ross told state lawmakers Aug. 19. “I'm upset about the process because it wasn't transparent: In January of this year, they had an initial meeting in executive session in the city of Taylor with this data center. Subsequently, there were four more meetings, and those were all in executive session.”
Ross said she was concerned that the prospective data center would use up local water resources and create light and noise disturbances for residents.
During an Aug. 18 meeting, the Taylor Planning and Zoning Commission voted to table the Project Mustang plan for 90 days, according to city records.
Kyle Workman, Precinct 3 commissioner for Leon County in East Texas, said local officials need more regulatory authority over data centers, particularly in unincorporated areas.
“Approaching [data center] projects from a centralized, state-level perspective leaves individual communities, particularly in small rural areas, without the critical ability to tailor project requirements to any unique locational circumstances,” Workman said. “As local elected officials, we are closest to those which may be affected, and are informed as to the most unique circumstances surrounding each individualized proposed project.”
Committee chair Rep. Ken King, R-Canadian, said the legislature would need to balance local government authority with landowners’ rights.
“I hear a lot about local control and giving the county a certain local recommendation, but a lot of the ideas that are proposed [would] kind of erode private property rights,” King said during the hearing.
Updated 10:35 a.m. Aug. 19
Rep. Richard Peña Raymond, D-Laredo, asked state agencies to compile information about how much water each proposed data center would use and whether those projects would need to purchase water from public systems or could reuse sources such as brackish water, which is a mixture of salt- and freshwater.
Robert Sadlier, deputy director of the Texas Commission on Environmental Quality's water quality division, said that data centers and other facilities are not required to state how much water they need when applying for TCEQ permits. The Public Utility Commission is the only agency currently collecting that data, according to Temple McKinnon, water supply director for the Texas Water Development Board.
In June, PUC officials told a separate House committee that just 28 companies representing less than 100 facilities had responded to a survey on data centers' water use. The PUC is expected to share that information with the TWDB, TCEQ and state lawmakers by the end of the year.
McKinnon said in June that about 17% of 341 surveyed data centers had responded to a separate TWDB survey about water use. She noted Aug. 19 that the response rate had grown to 29% in the past two months.
The TWDB only surveys existing facilities and does not look at proposed projects, McKinnon said.
Updated 9:30 a.m. Aug. 19
The Aug. 19 House State Affairs hearing kicked off with testimony from state grid officials and energy regulators. Lawmakers also invited other state agencies; data center companies and industry representatives; local government officials; cybersecurity experts; and utility companies to speak. Testimony on data centers will be capped at six hours, and the committee is alternating between panels of invited and public speakers, committee chair Rep. Ken King, R-Canadian, said.
Pablo Vegas, CEO of the Electric Reliability Council of Texas, echoed remarks made by other agency officials last week. It will take the grid operator several months to audit about 200 gigawatts of data center proposals, he said Aug. 19, and ERCOT will request information from all large and medium-sized data centers that are expected to use at least 25 megawatts—or 0.025 gigawatts—of electricity.
"You'll get descriptive statistics out of that [on] how much the tax abatements are, how much water [they're using], and then from that we can come back to you all, given your policy priorities around potential legislation or other things based on that information that you all may see as necessary as we're trying to bring on these data centers," PUC chairman Thomas Gleeson told lawmakers Aug. 19. "That's really the goal, as we understand it from the governor's directive, is to gather that information ... so it can help inform decisions going forward."
ERCOT anticipates completing the audit in late November or early December, Vegas said. Officials will then launch a separate "batch study" to determine how much electricity each prospective data center would need, how much it would cost to serve each data center and if additional transmission lines must be built to serve these facilities. ERCOT originally planned to launch its batch study in September, according to previous Community Impact reporting, but it was postponed while the agency works on the data center audit ordered by Gov. Greg Abbott.
"This batch concept came about because we were seeing a very high volume, a very rapid increase in the number of connection requests, particularly of data centers, and we recognized that there was a risk in how that was being processed," Vegas said. "They were effectively kind of jumbling and getting on top of each other as each study was done to evaluate whether it could be connected safely to the grid."
Originally published 7 a.m. Aug. 19
In early August, Gov. Greg Abbott ordered a “comprehensive verification and audit” of all data centers seeking to connect to Texas’ power grid, halting the approval of new data center projects.
Texas House lawmakers are set to hear invited and public testimony during a wide-ranging data center hearing Aug. 19, marking the first legislative hearing about the booming industry since the audit was announced.
Community Impact will update this article throughout the hearing.
What to expect
Topics before the House State Affairs Committee will include:
- How Texas data center development contributes to competitiveness and national security
- Economic and workforce growth related to data centers
- State data center regulations and the role of local governments in planning and managing growth
- The Electric Reliability Council of Texas’ approval process for data centers
- How data centers impact the state power grid
- Plans to build large high voltage transmission lines, known as 765-kV lines, from East to West Texas
The 765-kV plans are pending before the Public Utility Commission of Texas amid pushback from landowners and some state lawmakers.
The hearing is scheduled for 8 a.m. Aug. 19 in room 140 of the John H. Reagan State Office Building in Austin, according to the meeting notice. Those interested in speaking to the committee must register at kiosks outside the hearing room before 10 a.m., and written comments can be submitted here until the hearing ends.
Other data center-focused hearings this summer have included testimony from state regulators, energy executives, data center developers, landowners and residents from across Texas.
The background
Under the audit ordered by Abbott, proposed data centers in line to join the ERCOT grid must provide the state information about their electric and water use; water resource impacts; how they plan to mitigate effects on nearby communities; the tax incentives they are receiving; and who owns each proposed facility, Community Impact reported.
Dozens of data centers have released statements expressing support for the state audit and Abbott’s standards. The Data Center Coalition, which advocates for the industry, also supports his approach, Abbott announced Aug. 18.
ERCOT plans to audit between 250-300 proposals for large facilities, most of which are data centers, as part of the process, officials said during an Aug. 14 PUC meeting. The agency was already planning to evaluate large projects under a scheduled “batch study,” although it postponed that process and moved audit requirements “to the front of the line” under the governor’s order, according to Chad Seely, ERCOT’s general counsel and chief compliance officer.
It will take ERCOT “several months” to audit roughly 200 gigawatts of “potentially eligible large loads,” Seely told the commission. That prospective demand is more than twice ERCOT’s recent demand record of 91 gigawatts, which was set on July 22.
“We want to kind of be holistic and grab as much information as possible to get back to the PUC, to the legislature and the governor,” Seely said Aug. 14. “From a holistic standpoint, having all that community impact information on how [data centers] are handling water technology and power deliverability gives a better perspective to the state as we see these loads start to come onto the grid over the next several years.”
ERCOT will present more detailed information about how the audits will work and how long they will take during PUC meetings this week, Seely noted.
More context
Recent Community Impact articles on the Texas power grid and the data center debate at the legislature include:
