July 23, 2026 – AUSTIN, Texas — Tech infrastructure developer Diode Ventures has officially withdrawn its proposal to build a massive, high-density data center near Cedar Creek Lake in Henderson County. The decision comes as local grassroots opposition reached a boiling point and Governor Greg Abbott issued explicit new requirements for data centers operating within the state.
Grassroots Opposition: “Save Cedar Creek Lake”
While state officials framed the withdrawal around grid standards, the groundwork was laid by weeks of intense local organizing. Residents living near the proposed site—situated on the lake’s west shore between Trinidad and Tool—formed a advocacy coalition named Save Cedar Creek Lake to combat the development.
Community members rallied against the facility over critical concerns regarding natural resources and quality of life:
- Massive Water Consumption: Reports indicated the facility could draw up to 5 million gallons of water daily from Cedar Creek Lake for cooling—a reservoir that supplies drinking water to local communities and over a million North Texas residents.
- Noise and Light Pollution: Neighbors raised alarms over constant low-frequency noise from heavy-duty industrial cooling fans and potential on-site natural gas power generation, which threatened the quiet, rural character of the lakeshore.
- Lack of Transparency: Organizers criticized the developer for failing to hold open community discussions early in the process, forcing residents to seek information through local public utility records.
An online and community petition launched by local advocates quickly garnered nearly 4,000 signatures. The coalition called on county commissioners, local utility boards, and state lawmakers to halt the project and enact a temporary pause on new rural data centers across Texas.
Local Agencies and State Take Action
The intense pushback delivered swift regulatory friction for the project:
- Utility Lockout: On May 21, the West Cedar Creek Municipal Utility District voted to temporarily suspend high-intensity water commitments through 2027 to protect local water security.
- Statewide Directives: Following public outcry, Governor Abbott issued a directive on June 10 to the Public Utility Commission (PUC) and ERCOT. The order mandates that data center projects pay 100% of their power infrastructure costs, lower residential electric bills, add net power to the grid, and utilize closed-loop, water-efficient cooling systems.
“Data centers that want to do business in Texas must meet a clear standard. This project did not,” Governor Abbott said in a statement accompanying the press release. “Diode did the right thing by withdrawing their project.”
In its withdrawal notice to Henderson County, Diode acknowledged community feedback, concluding that the rural lakeside location near residential neighborhoods did not meet community expectations or the governor’s strict updated criteria.
