Data Centers Meet Their Skeptics

Activists participating in a “Data Center Week of Action” converged at the Capitol on Monday, demanding Governor Greg Abbott call a special session to address concerns about their impact on natural resources like water and electricity.

The online and in-person events were organized by Alliance for a Clean Texas and Public Citizen's Texas Office.

Attendees heard from speakers across the political spectrum, including outgoing Agriculture Commissioner Sid Miller, a Republican who was defeated in his primary by Frisco businessman Nate Sheets. Abbott backed Sheets over Miller, who has faced a series of controversies and has been unafraid to buck Abbott during his tenure.

“He can hear everything we're saying, and I invite him to come down here and join us today,” Miller said. “The governor has authority to bring the legislature back tomorrow. He can have them in session tomorrow. So we're calling on him to do just that.”

Clayton Tucker, the Democratic nominee for Agriculture Commissioner, also spoke. The progressive Democrat has made opposition to data center development a center of his campaign. (While he wasn’t there, country musician Willie Nelson chimed in support of the activists and in opposition to the centers on X, formerly Twitter.

While Abbott has declined to call a special session, he directed state agencies to ensure costs for new electrical infrastructure are not passed onto ratepayers. He called for a slew of legislative priorities for lawmakers next session, including repealing their sales tax exemptions, heightened and barring their construction in rural areas. The Legislature convenes next January. 

On Tuesday, the powerful Senate Finance committee heard testimony about the sales tax exemption that passed in 2013 and was bolstered in 2015 to attract data centers to the state.

What was once a small industry has ballooned, a representative from the Comptroller of Public Accounts office, which oversees the state’s tax rolls, noted. The exemption has cost the state up to $3.2 billion in revenue. 

Dan Diorio, vice president of state policy for the Data Center Coalition, an industry organization representing some of the top operators in the country, argued the industry provides meaningful, permanent jobs, is constantly investing in new environmentally friendly technology and even lowers property taxes. He noted that the industry must do better with community outreach, one of the few point which senators agreed.

Among the 30 people who spoke in opposition to the data centers was Donna Howard, who leads Matagdora County Against Data Centers and is not related to the veteran House lawmaker. She asked for a pause not because she’s anti-development, but because of a lack of communication with neighbors and a lack of understanding of rural communities by the industry.

When committee chair Joan Huffman, R-Houston, asked if Diorio was listening, she was met with silence.​ 

It turns out he left after an hour’s worth of questioning.

“To your point about hoping the industry and lobbyists and so forth are listening, is Mr. DiOrio from the coalition here?” she asked. “I think he got up and left after his testimony. So, he is not listening to a person who was handpicked by the chair who's [considered] to be a voice for the rural community because I knew she was well-spoken?”

Sen. Lois Kolkhorst, R-Brenham, agreed. “I don't mean disrespect to the members of the coalition but that’s unimpressive,” she said in her South Texas drawl. “Very unimpressive.”

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