Texas pumps the brakes on new data centers as Brownsville prepares to weigh in

Brownsville city leaders are expected to discuss the future of data center development Tuesday just as Texas ramps up scrutiny of the fast-growing industry statewide.

The Brownsville City Commission is scheduled to hold a workshop on data center development on Tuesday. The discussion comes ahead of public hearings next month on a proposed 90-day moratorium that would temporarily halt approvals for new data centers while the city reviews its development regulations.  

One day before the workshop, Gov. Greg Abbott directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas, or ERCOT, to conduct a statewide review of proposed data centers seeking to connect to the Texas electric grid before approving new interconnections.

According to The Texas Tribune, the governor ordered regulators to require developers to provide additional information on projected electricity demand, water use, cooling systems, ownership, tax incentives and potential impacts on surrounding communities before projects move forward. Abbott said the review is intended to ensure the state has the information needed to evaluate the industry’s growing demands on Texas’ electric grid and water resources.

For Brownsville, the timing is notable.

The governor’s action came one day after Texas Agriculture Commissioner Sid Miller publicly pointed to the Rio Grande Valley as an example of why he believes the state needs stronger oversight of data center development.

The city was already reevaluating its approach to data center development after a developer sought approval to convert a former Walmart near the Port of Brownsville into a 265,000-square-foot data center. Although the developer later withdrew its request for a specific use permit before a Planning and Zoning Commission hearing, city leaders chose to move forward with Tuesday’s workshop to discuss how Brownsville should approach future proposals.

Brownsville is not the only Rio Grande Valley community grappling with the issue.

In neighboring Cameron County, a proposed Eneus data center outside Harlingen has generated months of debate over water consumption, electricity demand, and the long-term impact on public infrastructure. Harlingen later approved a moratorium on new data centers within city limits, though it did not apply to the Cameron County project because it lies outside the city’s jurisdiction.

Texas cities are already limited and cannot outright ban any legal business from operating within city limits, whether it’s a car wash, smoke shop, data center or adult entertainment club. 

Cities do require businesses to adhere to zoning laws and may restrict how a business can operate or where a business can open under narrow parameters. 

For example, Brownsville is considering permitting data centers to operate with a special use permit in heavy industrial zones no larger than 5 acres of land using a closed-loop water system and requiring the developer to be fully responsible for infrastructure improvements at the site. 

Harlingen’s temporary ban is expected to run out by mid-September 2026, and the city would be required to consider any new data center applications through its zoning process, but Harlingen’s proposed data center sits inside Cameron County just outside city limits. 

On Sunday, Miller used the Rio Grande Valley to illustrate what he described as the need for stronger oversight of the rapidly expanding industry.

In a social media post, the agriculture commissioner noted that Texas has 335 operating data centers and another 247 planned before highlighting several developments in the region.

Among them, Miller cited the proposed Cameron County data center and its 50-year water agreement, ongoing litigation over public records, Harlingen’s moratorium and Brownsville’s upcoming workshop.

“Now look at what’s happening in the Rio Grande Valley,” Miller wrote before outlining the local developments.

Miller argued that communities are increasingly being asked to evaluate projects that could consume significant amounts of electricity and water before the state has established a more comprehensive regulatory framework.

Abbott’s announcement the following day brought those same concerns into the statewide conversation.

According to The Texas Tribune, the governor’s order also pauses approvals for new data center interconnections while regulators complete their review of proposed projects seeking access to the Texas electric grid.

Tuesday’s workshop comes ahead of public hearings scheduled for Sept. 1 and Oct. 6 on the proposed moratorium ordinance, which would temporarily suspend the acceptance, processing and approval of applications for new data centers while the city reviews its development regulations