AUSTIN, Texas (AP) — Gov. Greg Abbott announced Thursday that a proposed data center project in East Texas has been withdrawn after the developer determined it did not meet the standards established by the governor for new data center developments.
According to a news release from Abbott’s office, Diode will no longer pursue its proposed data center near Cedar Creek Lake in Henderson County after determining the project did not satisfy the governor’s directives or community expectations.
Abbott said Texas expects companies to put communities first,
“Data centers that want to do business in Texas must meet a clear standard. This project did not,” Abbott said in a statement. He added that Texas expects companies to put communities first, protect natural resources and the state’s power grid, and respect residents’ quality of life. Abbott said Diode “did the right thing” by withdrawing the proposal.
The governor’s office said Abbott outlined the standards in a June 10 directive to the Public Utility Commission of Texas and the Electric Reliability Council of Texas.
According to the release, those expectations require data centers to:
- Pay the full cost of their electric infrastructure rather than passing costs on to residential customers.
- Add new electric generation capacity instead of only increasing demand on the grid.
- Use water-efficient technologies, including closed-loop cooling systems, to reduce water consumption.
- Help lower residential electricity costs through their grid interconnections.
- Reduce impacts on nearby neighborhoods through measures such as setbacks and noise-reduction technology.
Abbott also said he will seek legislation requiring large data centers to annually report electricity and water usage to the Public Utility Commission and repeal certain tax exemptions and incentives for data centers.
The governor’s office said Abbott will continue pursuing policies intended to ensure data center development does not come at the expense of Texas families or rural communities.