Texas Data Center Withdraws After Falling Short Of Standards

AUSTIN, TX – Governor Greg Abbott today announced that Diode will not pursue a proposed data center near Cedar Creek Lake in Henderson County. In a notice to Henderson County officials, Diode determined the project did not meet the Governor’s directives or community expectations.

“Data centers that want to do business in Texas must meet a clear standard. This project did not,” said Governor Abbott. “Texas requires companies to put communities first, protect our natural resources and power grid, and respect the quality of life of our residents. Diode did the right thing by withdrawing their project. If other data center developments refuse to meet these standards, I expect them to do the same.”

Governor Abbott’s expectations were made clear in a June 10 directive to the Public Utilities Commission (PUC) and the Electric Reliability Council Of Texas (ERCOT). Those expectations include:

• Ensure that data centers’ interconnections will result in reduced residential electrical bills
• Require data centers to pay for all of their electric infrastructure costs to ensure that no residential ratepayer is burdened by those costs
• Ensure data centers add to Texas’ electric capacity, not just its electric demand
• Require that all new data centers be built with water-efficient technologies such as closed-loop cooling systems, so as not to drain local water resources
• Require data centers to reduce impacts on local communities by implementing best practices such as setbacks from neighborhoods, noise-reduction technology, and other measures that take into account the concerns of neighbors

The Governor will seek legislation to codify these expectations as well as: 

• Require large data centers to annually report electricity and water usage data to the PUC
• Repeal sales tax exemptions and other outdated or unnecessary incentives for data centers 

Governor Abbott will continue to advance policies that ensure data center growth does not come at the expense of Texas families or rural communities.