Austin Tech Commission Backs Data Center Recommendations

Austin’s Technology Commission voted Wednesday to send the City Council a set of recommendations on data center development, adding proposed language on fines, water use reporting and decommissioning bonds.

The May 13 meeting centered on the city’s role in responding to data center growth, including how Austin could evaluate water, energy, land use, transparency and community impacts tied to large computing facilities. The agenda included a University of Texas presentation on data centers, a GFiber (formerly Google Fiber) update on affordable Internet options and a vote on recommendations from the commission’s AI and Public Surveillance working groups.

The commission approved the data center recommendation unanimously.

The University of Texas presentation came from researchers with Collaborative Optimization & Management of Power Allocation, Surface & Subsurface strategies (COMPASS) consortium, known as COMPASS. Dr. Ning Lin, chief economist at the Center for Energy Economics, told commissioners the group is studying large loads that intersect with water, land, power and communities, including data centers, manufacturing, energy and petrochemical facilities. She said Texas has more than 400 existing data centers, most clustered around the Interstate 35 corridor from Dallas through Austin, San Antonio and Houston, with larger AI training data centers being announced in energy-producing regions such as West Texas and the Panhandle.

Lin said there are more than 410 gigawatts in the Electric Reliability Council of Texas (ERCOT) interconnection queue and that data centers account for 70 percent or more of that total. She said COMPASS is examining six areas that affect whether a data center project can be delivered: power grid access, water resources, permitting, financing, on-site generation and community acceptance.

The data center recommendation drew public comment from Kevin Welch, president of the board at EFF-Austin, who urged the city to ensure any future rules include financial consequences large enough to discourage violations. Welch also asked commissioners to consider limits on tax incentives for data centers whose computing capacity could be used for surveillance purposes, and to explore ways individuals could access data center computing capacity without relying on large AI companies as intermediaries.

Commissioners amended the recommendation during the meeting. One change retained disclosure of projected and actual water use for large-scale data center facilities and a requirement for at least 50 percent of grid consumption to be offset, while removing more specific water-pricing language that commissioners said could single out one industry rather than address large commercial or industrial users more broadly.

Commission Chair Steven Apodaca also proposed adding a decommissioning bond requirement to address what he described as stranded asset risk. Under the proposed language read into the record, data center developers would post a bond as a condition of project approval or an incentive agreement, with the amount tied to site remediation, community impact mitigation, demolition or site-security costs. The proposed bond trigger would be operational abandonment, defined as 12 consecutive months in which a facility fails to maintain at least 20 percent of projected utility load or 20 percent of committed staffing levels, verified by annual independent audit.

After adopting amendments, commissioners voted unanimously to approve the modified recommendation and send it to the City Council.

GFiber also presented on affordable Internet options. John Michael Cortez, head of government and community affairs for GFiber in the South and Southwest, said the company is nearly finished building out within Austin’s corporate limits and has continued expanding into unincorporated areas and nearby communities. He said GFiber is nearly done building out Round Rock, has started construction in Cedar Park and Lakeway, plans to be in Kyle and expects to break ground soon in Georgetown and Leander.

Cortez said GFiber provides free gigabit service to more than 4,000 public housing units in Austin through its Gigabit Communities program, primarily through a partnership with the local housing authority. He said the company also has piloted similar service in at least one permanent supportive housing development.

The commission lost quorum as it prepared to move to agenda item four, a presentation on a city-developed AI capability and Austin Public Health’s internally developed AI innovation platform. Because of the lost quorum, the commission did not reach the presentation or the 2027 annual work plan planning discussion, approval of Grant for Technology Opportunities Program Mini and Capacity 2026 recipients, a working group update on data center findings and future agenda items.