Data Centers Stir Controversy in Texas Amid Growth Boom

By Norah O’Donnell

Norah O’Donnell, a senior correspondent for CBS News, covers the data center expansion in Texas. A year ago, a data center proposal in Hood County, Texas, promised economic benefits but lacked specifics, according to County Commissioner Dave Eagle. While traditionally located in urban areas, 67% of planned centers are now rural, like Hood County.

Eagle and his colleagues were skeptical of the promises made by companies such as Amazon Web Services (AWS), which sought up to 90% property tax rebates over 30 years. Ultimately, Eagle voted down the proposal in Hood County, but AWS succeeded in the neighboring county.

Amazon spokesperson: “Amazon evaluates various sites as potential options, and Hood County was among them. However, we decided against building there.”

Understanding the Data Center Expansion

The expansion of data centers is partly driven by the AI boom, increasing demand for powerful computer chips. These centers are larger than before, consuming vast amounts of electricity. For example, modern AI data centers can be up to 1,000 megawatts, vastly larger than past centers.

Hyperscalers like Meta and Google plan significant investments through 2027, leading to concerns about whether the U.S. will eventually reach a limit in data center construction.

Concerns and Impact

While data centers provide substantial computing power, enabling advances in AI, they’re met with resistance across political lines. Jazmin Villegas, a Texas resident, questions the local impact, including health risks from pollution. Additionally, Chandler, Arizona residents are concerned about water usage for cooling data centers.

In Loudoun County, Virginia, the world’s highest concentration of data centers led to noticeable rises in electricity bills. Residents express concerns over these developments.

A Political Flashpoint

Texas Governor Greg Abbott originally supported tech industry investments, yet recently paused new data center projects connected to the state power grid until audits are completed. The issue of data centers has become a bipartisan concern, with significant agreement among Republicans, Independents, and Democrats against local developments.

Dave Lowe, a conservative Republican and opponent of the nearby data center development in Red Oak, expresses serious concern. Residents meet regularly to resist local projects, highlighting the company’s proposal to build centers as large as seven campuses in their rural area.

Compass Datacenters statement: “Compass has engaged with local stakeholders to tailor our operations, investing in the electric grid and using closed-loop water systems.”

Governor Abbott stated that Texans must come first in approving connections to the Texas grid. Projects must adhere to complete audits and stringent standards to avoid adverse impacts on local communities and resources.

Gov. Abbott spokesperson: “Data centers must ensure their infrastructure does not impose costs on homes and businesses, and must not disrupt resources needed by Texans.”