Overview
- Gov. Gavin Newsom signed a seven‑bill package on Monday that shifts costs for new power and grid upgrades to data center operators, requires disclosures of water and electricity use, and removes some categorical environmental review exemptions.
- Texas Gov. Greg Abbott ordered the Texas Commission on Environmental Quality to halt all data center air and water permits until ERCOT and the Texas Water Development Board finish audits that evaluate the projects' effects on the power grid and water supplies, with TCEQ due to report back by Oct. 19 and ERCOT expecting to complete its audit in December.
- Grassroots opposition has already forced major delays: tracking by Data Center Watch shows roughly $68 billion in projects blocked or delayed in April–June and nearly $200 billion cumulatively in the first half of 2026.
- Industry groups warn the new state rules could push investment away from regulated states, while the federal government continues to promote rapid data center buildout as an economic priority.
- Regulators and analysts say meaningful AI capacity growth requires new generation and transmission that can take years to build, so the new state rules that make developers finance upgrades and disclose resource use could slow projects and raise the political stakes for local utilities, ratepayers, and midterm races.