Often used as shorthand for two opposing sides of America, California and Texas have finally found common ground — on data centers breaking ground.
The two most populous US states announced limits on data center development on Monday. California Gov. Gavin Newsom, a Democrat, signed a package of new laws regulating data centers. The laws require data centers to disclose information about electricity and water use, make data centers ineligible for environmental exemptions, and aim to ensure consumers aren’t saddled with rising energy costs, among other measures.
“While the Trump administration moves toward deregulation, communities are left to deal with the consequences — higher electricity demand, grid constraints, water use, and pollution,” Newsom said in a statement, adding, “With these laws, we are ensuring that Californians remain in the driver’s seat — and that those profiting from data centers aren’t doing so at our expense.”
Meanwhile, in the Lone Star State, Republican Gov. Greg Abbott directed the Texas Commission on Environmental Quality (TCEQ) to halt all new permits for data center development while the group that operates the state’s electrical grid carries out an audit.
“Simply put, Texans must come first,” Abbott said in a statement, adding that “data centers must pay their own way, protect our grid and water, and complete the ERCOT and TWDB audits,” referring to the Electric Reliability Council of Texas and the Texas Water Development Board.
“Until they do, TCEQ will issue no permits sought by data center projects,” he said.
The latest order expands on a moratorium that Abbott issued last month on new data center connections to the state’s electric grid.
It’s not exactly surprising to see the two political adversaries set their sights on the same target, given that it’s become a nonpartisan political issue. Democrats and Republicans have expressed concerns about the impacts of data centers, and Americans across the country have turned out to protest proposed developments.
Critics say data centers consume too much water, drive up electricity bills, and add noise pollution to the communities where they are built. Business Insider’s reporting previously found that the data center boom was contributing to water scarcity and rising electricity bills.
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A spokesperson for the Data Center Coalition said the industry trade group was “disappointed” to hear Newsom had signed the California laws and that the impacts for the industry in the state would be “sweeping and significant.”
“Legislation such as these create significant uncertainty and introduces potentially duplicative requirements that make doing business in California an unattractive proposition for data centers and other industries,” Khara Boender, director of government affairs in the West for the Data Center Coalition, said. “These bills are likely to further limit data center development in California—an already declining market—which pushes job creation, clean energy deployment, and tax revenue to neighboring states.”
The group also said in response to the permit pause in Texas that its members operating in the state were complying with the audit and shared the governor’s “goal of ensuring state agencies have the complete and accurate information they need to make fully informed decisions,” according to Cameron Poursoltan, Texas director of energy policy for the Data Center Coalition.
