Texans Elect Democrat Governor Who Vowed To Freeze Data Center Construction

Texas voters on Tuesday elected Democrat Gina Hinojosa as governor after she promised an immediate halt to new data centers in the state.

Hinojosa defeated three-term Republican Gov. Greg Abbott by seven percentage points in a major upset, CBS News projected. She is the first Democrat elected governor since Ann Richards in 1990, and her campaign wants new data centers put on hold until state lawmakers pass protections, along with an end to the state’s tax breaks for the facilities.

“We need an immediate moratorium on data centers to last until the legislature can meet to put in place real protections so Texans can have a seat at the table to decide if and how data centers come into their communities,” her campaign website says.

Hinojosa will lead a state that holds more than a quarter of the data center capacity planned in the U.S. through 2030, Yahoo Finance reported.

Bloom Energy projects that Texas could make up almost 30 percent of the nation’s electricity demand for artificial intelligence by 2028, Agence France-Presse reported.

“There is nowhere else for data centers to go,” Stuart Turley, president and CEO of Sandstone Group, said in a statement to the Daily Caller News Foundation.

Turley said he had told landowners hoping to sell to data center developers to wait until after the midterms.

“If the Democrats get into power, they will shut them all down and raise energy prices, and China wins,” he said.

Abbott’s office, the Hinojosa campaign, the Public Utility Commission of Texas and the state’s grid operator, the Electric Reliability Council of Texas (ERCOT), did not immediately respond to the DCNF’s requests for comment.

Abbott paused new data center approvals himself in August. On Aug. 3, he told the utility commission and ERCOT to audit every data center trying to connect to the grid, and no new ones can be approved until those audits are done, The Texas Tribune reported.

Abbott said projects that fail the audit should be denied a connection, according to the Tribune.

Over 1,800 projects were waiting in line to connect at the time, the Tribune reported. Together they were asking for more than 474 gigawatts, which ERCOT said is over five times the record peak on its grid. Abbott said that about 90 percent of the new requests for power came from data centers.

“Data centers must pay for their own electric infrastructure, add power instead of only adding demand, reuse their own water, reduce the cost of electricity for Texans, not disrupt residential neighborhoods, and eliminate reliance on outdated taxpayer-funded incentives,” Abbott’s press secretary, Andrew Mahaleris, said in a September statement to the DCNF.

“TCEQ will issue no data center permits until ERCOT completes its review,” Mahaleris added.

Hinojosa called Abbott’s move an “election year pause,” Yahoo Finance reported.

“A temporary moratorium is a scam because Abbott will likely lift it on November 4th, right after the election,” her campaign website says.

Turley said that Abbott is “supposed to make a determination in December” on the hold and that the new governor “could cause problems for any that he approves after the review recommendation is set.”

If new data centers cannot connect, Turley said that “the Texas low-cost power will become more like California.”

Elon Musk, whose companies have major operations in Texas, posted on X after the results came in that “data centers in space” were “looking pretty appealing right now,” AFP reported.

AI stocks, SpaceX among them, were under pressure before U.S. markets opened Wednesday on worries about stricter rules, AFP reported.

“None of this necessarily breaks the long-term AI theme, but it can raise the hurdle rate for investment,” Patrick Munnelly, a Tickmill Group market strategist, said, according to AFP.

Hinojosa has insisted that a governor can order a moratorium without the Legislature.

“Greg Abbott has the power to issue a moratorium and call the legislature into special session today,” she wrote on X in October.

Lawyers at the firm K&L Gates saw it differently in an Aug. 4 analysis of Abbott’s letter. “The governor cannot personally halt grid connections or order these agencies to act,” they wrote. “His letter reads like a command, but the legal action has to come from the agencies, and even then, they may not have full authority.”

The commission has also asked for more power. Its chairman, Thomas Gleeson, wrote to Abbott on July 17 that lawmakers would have to act before the commission could regulate the industry more fully, the law firm Troutman Pepper Locke reported.

Texas’ governor has “fairly limited powers,” David Blackmon, an energy analyst and writer, said in a statement to the DCNF.

“A permanent ban would technically require the legislature to act, but Gov. Hinojosa could wreak economic havoc via an extended series of executive actions from her new perch,” Blackmon said.

The effect on natural gas producers “would be minimal given the broad diversity of demand for their products,” he said. “But the state will see billions of dollars in planned infrastructure development — data centers, manufacturing complexes, and power plants — flee the state for friendlier confines.”

Ending the tax breaks would take a vote of the Legislature as well. Democrats won the Texas House, gaining at least 18 seats in unofficial returns, The Texan reported, while Republicans look set to keep the state Senate, according to The Texas Tribune.

Hinojosa is set to take office on Jan. 19, 2027.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.