A wave of local efforts to slow or block data center projects is spreading across Texas, as communities push back against the rapid expansion of facilities expected to drive the state's next surge in electricity demand.
Counties and cities have in recent months proposed or enacted moratoriums, denied zoning requests and imposed new restrictions, citing concerns over water use, grid strain, noise and the industrialization of rural areas. The local-level backlash has intensified since February, striking in even heavily Republican-leaning districts.
Hill County, south of Dallas-Fort Worth, approved a moratorium targeting data centers and related infrastructure, prompting a lawsuit this week from developers seeking to invalidate the measure. Van Zandt County adopted a broader "green energy" moratorium, while similar proposals in Hays and Tom Green counties have been tabled following legal concerns. Hood County commissioners narrowly rejected a comparable measure.
"You have counties adopting moratoriums over the objection of their own attorneys, who are saying they don't have the authority to do this," said Tina Nguyen, a litigation partner at Baker Botts, in a webinar Thursday.
At the city level, San Marcos denied a rezoning request after hours of debate focused on water availability. Harlingen imposed a temporary ban on new applications, and San Angelo adopted new setback and noise requirements. Round Rock, by contrast, approved a project despite opposition.
The opposition comes as Texas has become a leading hub for data center development tied to artificial intelligence, with regulators projecting electricity demand could more than quadruple by 2032. Texas currently has about 87 operating data centers and roughly 156 planned projects, positioning the state to overtake Virginia as the largest US data center market later this decade, according to industry figures presented by Baker Botts.
Growing chorus of disapproval
The local resistance is spilling into statewide politics and has begun to elicit rare bipartisan agreement in some corners.
Texas Agriculture Commissioner Sid Miller recently called for a temporary statewide moratorium on new data center development, warning that the rapid growth of such facilities is straining the Lone Star State's resources. The three-term commissioner endorsed by President Donald Trump lost his Republican primary in March and will not stand for re-election. The Democratic challenger in the race has also advocated for a statewide moratorium.
Legal experts suggest counties may lack the authority to impose broad development moratoriums, raising the likelihood of further court challenges. Developers are increasingly seeking injunctions to block enforcement, warning that even temporary delays can disrupt financing and timelines.
Uncertainty created by the disputes could stymie project development as Texas regulators move to integrate a surge of large electricity users.
Under a new process being finalized by the Electric Reliability Council of Texas (ERCOT), projects must certify they have secured all required local approvals or that none are needed to qualify for accelerated interconnection.
"The problem is the rule doesn't distinguish between a lawful government action and an illegal one," said Juliana Sersen, a former ERCOT attorney and partner at Baker Botts. That dynamic could leave some projects unable to meet requirements if subject to local moratoriums, even if those restrictions are later overturned, she said.
