Texas lawmakers explore new regulations for data centers

AUSTIN, Texas - Texas lawmakers are looking for a way to balance the booming tech industry with the reality of finite resources. 

The House State Affairs Committee met on Thursday to study how the massive growth of data centers is impacting our quality of life. 

The backstory:

While data centers bring jobs and tax revenue, they are also sparking major controversy in places like San Marcos. Recently, city leaders there rejected a massive data center project after hundreds of residents expressed concerns over water shortages.

Hays County leaders even called for a moratorium on industrial projects to protect the aquifer during the current drought. 

During a hearing, lawmakers discussed ways to streamline regulations while helping towns plan better. 

Beyond water, the committee is studying how data centers affect the reliability of the electric grid. 

What they're saying:

"We want this development here, but we have to balance that with costs. You know costs have gone up a lot in this state since Winter Storm Uri for a myriad of reasons, mostly centered on reliability and resilience, which were necessary. Again, these costs are really on the system because of these ultra-large loads and the amount of energy and transmission they need to be served. As I said in my opening statement, we at the PUC are looking at all the ways we can address that," said Thomas Gleeson, chair of the Public Utility Commission of Texas. 

What's next:

The Public Utility Commission of Texas said it's exploring ways energy transmission costs are allocated for data centers. 

Regulators are also looking to companies to bring their own power generation, so costs don't go up.

Ideas from the hearing could be implemented during the next legislature that starts in 2027.