Texas Governor Greg Abbott and California Governor Gavin Newsom just introduced new data center rules — and it's a big win for local communities

Texas Governor Greg Abbott and California Governor Gavin Newsom have introduced new data center rules aimed at benefiting local communities. Texas Governor Abbott has placed a moratorium on new data centers until a new electricity audit is completed, preventing any new data centers from receiving environmental permits or grid permissions.

California Governor Newsom, on the other hand, has signed into law regulations that grant communities greater control over the water, electricity, and land usage of data centers built in the state. This comes as states are increasingly prioritizing local communities over big tech companies. Texas Governor Abbott emphasized, "Texans must come first.

Data centers must pay their own way, protect our grid and water, and complete the ERCOT and audits." ERCOT, which manages the Texas electricity grid, predicts that approvals for data centers to connect may be delayed until December, when the audit is expected to be finished. Texans have expressed strong opinions on data centers, particularly concerning land use, noise, pollution, and strain on the electricity grid.

This pushback has led to an increase in local candidates running for office. Texas Governor Abbott, previously supportive of data centers, now views them as facing "the backlash they deserve." Meanwhile, California Governor Newsom's new regulations aim to shift costs associated with data centers connecting to resources away from the public and onto the data centers themselves.

These measures include data centers paying for electrical grid connections and upgrades, as well as adding clean energy to supplement additional energy consumption. Additionally, water usage and land usage requirements have been introduced, requiring local governments to be informed of water supply, efficiency, drought planning, and infrastructural upgrades.

Federal regulation may also be on the horizon, with the Ratepayer Protection Act proposed to require developers of medium and large data center campuses to pay for infrastructural upgrades and grid connections for campuses with a peak power of over 100MW. The Act has received bipartisan support and is currently being reviewed by Congress.

Despite opposition from the White House, which claims that opposing AI data centers would result in the loss of jobs and money, the trend of local opposition to data center projects has been significant, with over $68 billion in data center projects blocked in the second quarter of 2026.