The state's automated system had continued issuing construction permits even after Governor Greg Abbott had called for a pause a month ago.
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Now, the portal that previously automatically authorized permits is unavailable. “TCEQ’s electronic filing application used for automatic authorizations has been temporarily shut down to ensure all applications are reviewed by agency staff to determine if they are related to data centers," a message on the website reads.
The portal, called STEERS, is used to rubber-stamp construction approvals. But despite Governor Abbott's call for no new permits to be approved, it seems that nobody thought to take STEERS offline. Sam Law, a researcher at FracTracker, says that it's been happily approving new projects, including those for OpenAI and Amazon that went through the system earlier this week. All 17 of the suspended permits are for stormwater construction, a process that sees construction companies raise and level the ground. It's also a process that is a vital part of the approval process for all construction projects in Texas.
Governor Abbot put the brakes on 1,800 data center projects while work was done to audit them. Concerns were raised about their power use and generation, how much water they would consume, and the impact that they would have on their communities. “Our top priority is to protect Texans’ safety and quality of life,” Abbott wrote in a statement provided at the time. “Any project that fails to comply with the requirements set forth by the PUCT and ERCOT, and by state law, must be denied connection to the Texas grid. Simply put, Texans must come first.”
The situation in Texas follows New York's year-long ban on data center projects larger than 50 megawatts that came into force earlier this year. The Responsible Data Center Development Act was signed into law as Senate Bill S10642 by New York Governor Kathy Hochul in July. It was another instance of a change in stance on data centers that is gathering momentum in the United States. While President Trump announced an "AI Action Plan" to accelerate adoption of AI tools and infrastructure rollout in July 2025, he announced a mandate forcing AI data centers to pay dividends to communities in October 2026. In Northern Virginia, Amazon bowed to a community backlash to plans to build four new data centers — going so far as to offer its land up for housing instead.
Texas slams on the brakes for 1,800 data centers, power grid requirements are five times higher than peak record demand
300-plus local data center bans have only delayed just three US projects
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/data-centers/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/data-centers/texas-has-suspended-17-data-center-construction-permits-and-shut-down-automated-portal-used-to-approve-them-site-was-left-running-for-a-month-after-greg-abbott-called-for-a-pause-on-approvals#main
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