Texas lieutenant governor candidate calls for moratorium on data centers

(CN) — Texas Democratic lieutenant governor candidate Vikki Goodwin called Tuesday for a moratorium on new data centers in the state until more regulation is passed.

Goodwin, who currently represents part of Austin in the Texas House of Representatives, held a press conference in the city with state and local leaders calling for limits on data center construction due to concerns like higher energy bills and water resource depletion.

“This issue is one that deserves a special session for the Legislature to weigh in and put in place regulations that ensure we are protecting our communities, providing transparency, ensuring costs aren’t passed along to households and that we are considering the implications of artificial intelligence, including the potential for job loss,” Goodwin said.

As part of a statement to Courthouse News on Goodwin’s call for a moratorium, Dan Diorio, executive VP of state policy and government affairs for Data Center Coalition, the membership group for the data center industry, said instituting one “on data centers sends negative signals not only to data center companies, but to other major businesses that can discourage further investment, undermine Texas’ economic growth, and introduce regulatory uncertainty that runs directly counter to Texas’ historic pro-business posture.”

Goodwin’s press conference coincided with the start of a three-day “PowerUp Data Centers” convention in Austin, where members of the data center and energy industries are gathering to discuss the increasing electricity demand caused by data centers, which the convention describes as “a generational opportunity for the energy industry to grow.”

“I believe they will be providing a very positive perspective of data centers,” Goodwin said of the convention. “Meanwhile, I hear so many concerns daily about this issue. So we are here to have a perspective that reflects what the people of Texas are communicating to us.”

Goodwin said she will be holding a series of town halls across Texas to listen to Texans’ thoughts on the issue of data centers. She urged people to attend and voice their concerns.

“Right now, the people living next to these proposed projects too often feel like they’re the last to know and the last to be consulted,” Goodwin said. “They deserve better. They deserve transparency. They deserve a seat at the table, and they deserve elected leaders who are willing to listen before making decisions that can’t be undone.”

Texas currently has the fastest-growing market for data centers in the country, with over 330 existing data centers and at least 248 more in the works. The growth of the industry in the state has been fueled in part by a data center sales tax exemption passed in 2013. The value of that exemption has ballooned in recent years, according to the Texas comptroller’s office, reaching over $1 billion in 2025.

“I believe there is bipartisan agreement in the Texas Legislature that this subsidy is a runaway subsidy and is blowing a hole in our state’s budget, and I anticipate that there will be bills in the 2027 Legislature to eradicate the subsidy or considerably curtail it,” Sarah Eckhardt, a Texas state senator and Democratic nominee for comptroller, said at the press conference.

Of the 248 new data centers currently planned in Texas, almost half will be in unincorporated areas, according to an analysis by The Texas Tribune, where county leaders have little authority to regulate their development.

“As data centers encroach on Hays and our neighboring counties, instead of empowering local leaders to make the best decision for our communities, the Legislature has stripped away authority from our cities and counties and concentrated that power in Austin,” said Michelle Gutierrez Cohen, a commissioner for Hays County and the Democratic nominee for the county judge.

She pointed to a case last month where Hill County, a small rural county in north central Texas, rescinded a data center moratorium after facing a $100 million lawsuit from a developer.

“Hill County is by no means a blue county,” Cohen said. “They are all Republicans, but the local leaders know what is best, and their constituents demanded action, but the state won’t let them.”