Data Center Boom Exposes GOP Faultlines over Local Control

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Caldwell County Judge Hoppy Haden, a stout 63-year-old who sports a cowboy hat and a white handlebar mustache, is hoppin’ mad about the artificial intelligence-fueled data center boom in his backyard.

Like so many other rural Republican county officials across the state, Haden is staring down several energy- and water-sucking data center projects that he and other county officials have very few powers to constrain. “By the time I hear about it, [developers have] already bought their land, so it’s not like they’re asking our permission to show up,” Haden told the Texas Observer. “So that’s frustrating, right? But I can’t do anything about that, so I’m trying to do something about things that I can do.”

The open pastures of rural Caldwell County, situated between Austin and San Antonio, are poised for at least four new data center developments. One of the largest developments is a 3,000-acre tech compound from the Denver-based data center developer Tract, which chose its site in Caldwell specifically for its access to the Permian Highway gas pipeline and to nearby transmission lines, according to the Caldwell/Hays Examiner. A New York-based data firm called Edged is planning another major data center on 330 acres near the county’s fracked gas plant.

The developments are among the more than 400 proposed data centers that are rapidly proliferating around Texas, and which collectively could, per the state’s power grid provider, quadruple electricity demand by 2032, and could consume as much as 161 billion gallons of water this year, according to the Houston Advanced Research Center. That’s in addition to the projects’ other well-publicized scourges, like light and noise pollution, heat, habitat loss, higher utility rates, greenhouse gas emissions, and potential health effects.

All this has Judge Haden walking a tight rope between current state law, which grants counties next-to-no zoning authority, and angry citizens who have banded together under the banner of the nonpartisan Caldwell Data Center Action Team (DCAT) to demand the county do whatever it can to stop or delay the developments for as long as possible. In some ways, Haden exemplifies the the ruling Republican Party’s divide over Texas’ data center boom, caught between unabashed champions like Governor Greg Abbott and grassroots conservatives pushing for an approach that seeks maximal local control, such as a countywide moratorium on data center development along the lines of what Hill County commissioners originally passed in May.

The policy debate thus far has exposed deeper tensions within the party as GOP state leaders have for years engaged in an expanding war on local control—aimed at big blue cities—in favor of state supremacy. But that ideological shift now has local Republicans finding that they, too, have fallen prey to that crusade.

So far, Haden and other county officials are choosing a middle lane between these political poles. Two days after Hill County commissioners passed their data center moratorium, Caldwell County commissioners took a more moderate action by unanimously passing a resolution calling on the state to grant counties greater land-use authorities to rein in data centers. The resolution also calls for independent environmental assessments and for developers to disclose their energy, water, and infrastructure impacts before they can proceed.

Haden is also working with his county’s state legislators, Republican state Representative Stan Gerdes and Democratic state Senator Judith Zaffirini, to draft legislation that would do just that. Haden says his draft bill would grant counties the ability to impose certain land-use requirements on data centers within county subdivision ordinances. This would allow county officials to impose a range of limits on data center projects, including clear limits on potable water use, stormwater use, and wastewater discharge, forcing the data centers to use more efficient closed-loop water cooling systems with non-potable water and “dark sky” lighting, among other stipulations.

“This is not a property rights bill. I’m not asking for [developers] to be able to come or not to come. What I am asking is to be able to regulate our national natural resources if they arrive here,” Haden told the Observer.

Right now, Haden says, counties can only impose such requirements as part of a development agreement that would grant developers lucrative tax abatements or reinvestment zones. For now, Haden says, the county is granting tax abatements as a means of leverage in order to ensure data centers follow basic rules—sparking ire among many of his constituents in the process.

(Photo illustration by Texas Observer)<br>Haden said Gerdes, who did not respond to the...