Overview
- Diode notified Henderson County officials on July 22–23 that it will not pursue the Key Ranch site near Cedar Creek Lake after completing an initial evaluation and consulting with residents and state and local leaders.
- Records show the proposal had sought approval to withdraw up to 5 million gallons of lake water per day with potential expansion to as much as 20 million gallons per day, figures that alarmed residents about local water supply and lake levels.
- Diode said community feedback and meetings with state officials convinced the company the parcel did not meet its standards for responsible development, and Governor Greg Abbott praised the withdrawal while urging lawmakers to codify stricter rules.
- Local activists and the Henderson County commissioners welcomed the decision and credited grassroots pressure, but they warned the landowner could sell to another developer and noted counties lack zoning power to block such projects.
- The episode highlights a broader fight in Texas over data centers and water use as state proposals advance to require closed‑loop or water‑efficient cooling, make developers pay for grid connections, report annual water and power use, and curb incentives ahead of the 2027 legislative session.