State Affairs Committee Chair Texas Rep. Ken King and other members of the committee had a lot of questions concerning data centers and 765kV transmission lines during a nine-hour meeting in Austin.
According to the Texas Tribune, lawmakers heard a variety of recommendations that included more local control of data center proposals and more time to reform the process behind approving transmission lines across the state.
The House meeting follows a July Senate Business and Commerce Committee interim hearing on both topics, where Lt. Gov. Dan Patrick and committee chair Charles Schwertner, called on the Public Utility Commission to scrap the 765kv project entirely.
D ays later, Gov. Greg Abbott announced a pause on approvals for data centers to connect to the electric grid until an audit of data centers seeking to connect was completed by the Electric Reliability Council of Texas. Lawmakers deliberated the transmission lines, particularly three firstof- their-kind 765-kilovolt lines that would slice through tens of thousands of acres of private property. Landowners have questioned the 180-day administrative window regulators have to approve or reject the proposal, arguing it was not enough time for residents to contest the plans and called for lawmakers to halt the plan entirely. Some lawmakers appeared receptive. Rep. Ken King questioned transmission service providers, such as Oncor and AEP, about whether the proposed routes were the correct solution. He said most of the opposition stemmed from issues with the routes. Representatives from Oncor, AEP and CPS Energy, which would be tasked with deploying the build-out of the lines, said that if approved, they would work with landowners whose properties are along the proposed routes to make modifications and diminish the impact to the land, but delays could result in higher costs. Industry leaders rejected the notion that only data centers would benefit from the transmission lines.
ERCOT officials reported they intend to carry out Abbott’s ordered audit of data centers, which is expected to go through the end of the year.
The audit has scrambled the grid operator’s efforts to organize the facilities seeking energization, roughly 90% of which are data centers. Prior to Abbott’s request, ERCOT expected to complete its study by April , when the first batch of about 250 data centers would receive approval to connect to the grid.
ERCOT is also surveying all data centers with an electricity demand of 25 megawatts or greater on their impact on the community, as directed by Abbott.
Regulators have already been working through a new way to decide how much of the cost of building new transmission lines needs to be paid for by individuals and how much needs to be paid for by companies such as data centers. Costs for new infrastructure have long been shared because it provides an arguable public benefit. Rep. Senfronia Thompason said it appears that citizens don’t have a choice, as data centers are being forced on them and they can say no - but they’ve got to pay, which is unfair and undemocratic.
Representatives on the committee also considered potential regulation for the data center industry they’d like to pass in the 2027 session. Several county officials testified that they need additional authority to manage the buildout of data centers in unincorporated areas of counties. In Texas, counties typically don’t have the power to block development, and a majority of the hundreds of data centers planned for the state are set to be built in unincorporated areas.
King expressed some trepidation that giving counties more authority over data center projects could result in overriding private citizens’ rights.
The committee appeared committed to repeal the state sales tax exemption for data centers, which has ballooned in recent years as more data centers are built and apply for the tax break.