Texas Requires Data Centers to Bear Power Costs; Galaxy and Two Other Firms Commit to Complying with New Regulatory Standards

Odaily reported that Texas Governor Greg Abbott announced that Galaxy Digital, Compass Datacenters, and Montera Infrastructure have committed to complying with new standards and regulatory requirements established by Texas for data center construction.

It is understood that these guidelines are being implemented across data center projects statewide, aiming to ensure that data center expansion does not add burdens to residents, nor affect grid stability, water supply, or community quality of life. Under the new rules, data center operators must meet several requirements, including: bearing the costs of power infrastructure themselves without shifting construction and operational costs onto Texas households and small businesses; implementing water recycling for their own use to reduce pressure on public water resources; taking measures to lower overall electricity costs; avoiding disruption to residential communities by reducing noise, light, and traffic impacts; and reducing dependence on government subsidies and taxpayer funds to achieve self-sustaining project operations.

Additionally, the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) will review data center projects, requiring companies to disclose project ownership structures, government subsidy details, electricity demand forecasts, self-built power generation plans, water usage plans, and community impact mitigation measures.