Gina Hinojosa’s Texas win puts data center approvals in question

Texas governor-elect Gina Hinojosa’s victory over Gov. Greg Abbott has put the state’s data center pipeline under fresh uncertainty. Hinojosa’s data center moratorium pledge could add to pauses and audits already imposed under Abbott, though its implementation will depend on actions after she takes office and on the Legislature.

Hinojosa won Tuesday’s governor’s race, according to Reuters and The Texas Tribune. She has said she would seek to halt new data center approvals until lawmakers enact protections for Texans, including a role for communities in deciding whether and how projects enter their areas.

Texas matters because it is one of the country’s leading markets for data center development. Reuters reported that Meta, Google and Microsoft have announced major Texas projects in the past two years, drawn by energy supplies, relatively low-cost land and the state’s historically business-friendly policies.

What has Gina Hinojosa promised on Texas data centers?

During the campaign, Hinojosa said she would issue a moratorium on data center approvals until the Legislature passes new protections, The Texas Tribune reported. Her campaign also called for limits on tax subsidies, safeguards for water supplies, rules aimed at preventing electricity costs from being shifted to Texans, union labor and more transparency around projects.

Those are campaign commitments, rather than policies already in force. Hinojosa is scheduled to take office on Jan. 19, and lasting laws or regulations will involve the Texas Legislature. The Texas Tribune reported that Democrats will control the state House, while earlier reporting said the Senate appeared likely to remain Republican.

What restrictions were already in place?

Abbott had already tightened state oversight before the election. Reuters reported that Texas stopped connecting new data centers to the grid on Aug. 3 and ordered an audit examining projected power demand, environmental effects and developer tax breaks.

The state also temporarily stopped issuing air permits for data center projects, Reuters reported. Abbott did not impose a formal statewide moratorium, and some of the measures, including the audit and air-permit pause, were expected to end or conclude by the close of 2026.

At the time Texas paused new grid connections, the state grid operator ERCOT was tracking more than 400 gigawatts of proposed data center projects seeking connections, Reuters reported. That volume has made approval rules, power costs and water use central concerns for both developers and communities.

Will Texas data center construction slow?

Delays are possible, but they are not certain. A Texas data center attorney told Reuters that some projects could be delayed or developers could leave the state, while other companies could try to complete projects sooner before any new restrictions take effect.

Dan Ives of Yorkville Ives & Co. told CNBC that Democratic midterm victories could slow the broader U.S. buildout. That is an analyst forecast, not an enacted nationwide policy. The most immediate decisions are likely to come from Texas officials and lawmakers after Hinojosa assumes office.

The Data Center Coalition said its members would continue building infrastructure in Texas while working with state and local governments, Reuters reported. That response points to negotiations over the conditions for future projects, rather than a confirmed halt to construction across the state.

This story draws on original reporting from Fortune.