Texans Need Liberty and Data Centers, Not New York Control

Originally published on Substack. 

​Texas has become the latest state to hit pause on data centers.

Gov. Greg Abbott’s new directive⁠ requires the PUC and ERCOT to audit every data center advancing through the grid-connection process before additional projects move forward.

Developers must disclose expected electricity and water use, public incentives, ownership, plans for producing their own power, cooling technology, and efforts to limit noise, traffic, light, and other local effects. Projects that do not comply can be denied access to the grid.

These are reasonable questions. Markets work best with reliable information. But according to ERCOT, the order has effectively paused all pending data-center projects⁠, with no clear timetable for completion.

That uncertainty has costs.

Texans Want Benefits, Not Bans

A new statewide poll⁠ found that only 8% of voters call data centers a top voting issue, while opinions move substantially when people receive more information. Abbott’s proposed guardrails received 82% support, including 94% among Republicans, 81% among independents, and 68% among Democrats.

But voters were not demanding prohibition. Support for nearby projects rose from 46%-45% to 55%-34% when respondents learned about jobs, school revenue, infrastructure improvements, and possible bill relief.
Texans want growth they can understand and see benefiting their communities. That is fair. It is not a mandate for central planning.

The Cloud Will Keep Growing

Data centers are the physical infrastructure behind the cloud⁠. Their servers process and store the information behind GPS, banking, telehealth, logistics, streaming, business software, artificial intelligence, and nearly every digital service Texans use.

Stopping construction does not stop that activity. Texans will keep sharing files, saving photos, navigating roads, streaming shows, and using AI. The servers will simply be built elsewhere.
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New York has already imposed the nation’s first statewide moratorium on new hyperscale data centers⁠. Texas Senate Democrats now want an immediate Texas moratorium⁠.

Texas should not copy New York. Whether investment is stopped by an explicit ban or an open-ended political approval process, the result can be similar: broken deals, lost jobs, delayed generation, and projects redirected to other states or countries.

Data Centers Are the Convenient Scapegoat

Electric bills and water concerns are real, but data centers did not create every affordability problem.

A recent electricity-rate analysis⁠ found no quantitative evidence that data centers have historically been subsidized by other customers. Rates reflect inflation, fuel volatility, grid investments, plant retirements, market design, and government permitting and interconnection barriers.

Likewise, data centers currently account for less than 1% of Texas water use⁠. Usage varies widely by cooling system, including closed-loop designs that reuse water.

The answer is more supply, not less progress.

Let Texas Build

Texas needs faster permitting, more generation, more transmission, better water pricing, more reuse, stronger property rights, and more private infrastructure. Prices and voluntary contracts already force businesses to weigh land, power, water, labor, and risk better than politicians can.

As I have argued, Texas should choose innovation over intervention⁠, fix government utility failures rather than blame data centers⁠, and compete for this investment instead of regulating it away⁠.

Texas became America’s economic leader by building, not banning what politicians did not understand.
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Let New York manage decline. Texas should keep building.