BaRupOn shifts data-center priorities outside Texas, executive says

BaRupOn has redirected its development priorities to sites outside Texas since the state paused environmental permits for data centers, chief operating officer Balaji Tammabattula told Inside Climate News in its October 30 report.

The California-based developer bought land in 2023 for a planned 700-acre industrial campus in Liberty, Texas, with data centers, rare-earth manufacturing facilities and its own power plants. Tammabattula said Abbott’s office initially worked closely with BaRupOn, recommending prospective sites and county officials to contact.

Tammabattula said BaRupOn met with neighbors while exploring a project in Gillette, Wyoming, after facing opposition in Texas. For a prospective facility in North Dakota, the company plans to give landowners small equity stakes.

What developers must satisfy

The restrictions build on regulations and planning processes introduced after the preceding legislative session to check the validity of data-center proposals seeking grid connections. In August 2026, Abbott instructed electricity regulators and grid operators to stop advancing data-center connection requests while officials audited the projects and gathered information.

The audit covers data centers undergoing the connection process run by the Electric Reliability Council of Texas (ERCOT), the grid operator. On 14 September, Abbott directed the Texas Water Development Board to enforce water-use reporting, impose legal consequences for noncompliance and work with ERCOT to collect more water-use information.

Abbott’s 21 September 2026, directive then ordered the Texas Commission on Environmental Quality (TCEQ) to halt all permits sought by data centers until ERCOT completed its audit. It also barred state agencies from advancing related regulatory approvals until the required information was obtained.

Under that directive, projects must:

• Cover all electrical infrastructure costs, result in lower residential electricity bills and complete the ERCOT audit.
• Report electricity and water use and avoid using water needed by local communities.
• Meet setback requirements—rules setting minimum distances from surrounding properties—to protect nearby communities.

The Public Utility Commission of Texas, the state utilities regulator, ERCOT and the water board are assigned to assess effects on grid reliability, grid security and community water resources. TCEQ must use their audit findings in its permit decisions. Abbott’s press secretary, Andrew Mahaleris, said related permits remain conditional on completing both audits and meeting the standards; projects that fail will be denied.

Officials and a watchdog dispute permit activity

TCEQ oversees air-pollution permits for gas-fueled power plants and diesel generators, as well as permits for stormwater runoff during construction. Its interim executive director said the agency had paused permits for construction or infrastructure directly supporting data centers, The Texas Tribune said in its October 20 report.

Public Citizen, an advocacy group, identified at least 6 new stormwater construction permits that it said were connected to data centers and approved after Abbott’s directive. TCEQ spokesman Ryan Vise said those permits had been suspended.

Abbott’s office disputed the account of approvals. Mahaleris said no permits had been approved and TCEQ had taken no proactive action toward approving data-center permits.

Developers face more decisions after the elections

Diode Ventures withdrew its Henderson County data-center proposal following Abbott’s directives and community opposition over water use. Abbott praised the withdrawal in a July statement, saying the project had failed his standards.

Olivier Beaufils, a researcher at Aurora Energy Research, expects political uncertainty to persist beyond November’s elections as the January legislative session approaches. He also expects more projects to be withdrawn as community opposition increases.

Abbott plans to work with lawmakers next session to eliminate financial incentives for data centers. He also plans to seek annual electricity- and water-use reporting by large data centers to the Public Utility Commission and repeal sales-tax exemptions or other incentives he considers outdated or unnecessary. Those proposed reporting and tax changes await legislative action.