Scores of data center companies operating in Texas could face criminal investigations for failing to respond to state-mandated inquiries regarding their water usage. State power and water regulators confirmed that most of the data centers identified by their agencies did not provide the requested information.
The Texas Water Development Board received responses from only 97 of the 324 facilities it contacted, representing fewer than 30%. The Public Utility Commission reported that fewer than half of the data centers its agency contacted responded to similar inquiries. Temple McKinnon, water supply planning director at the Texas Water Development Board, stated that companies failing to respond to their board's inquiry could face criminal charges. Enforcement of these potential charges would fall to local law enforcement agencies and district attorneys.
This lack of transparency from data center developers has contributed to growing public mistrust, making the rapid emergence of data centers a significant issue in this year’s election cycle, particularly in rural communities across the state. Rick Thompson, program director for the County Judges and Commissioners Association of Texas, addressed a Texas Senate committee hearing on Tuesday, asserting, "There’s not a bigger issue going on right now in Texas," and noted that much of the information circulating locally is misleading or untrue.
Public Utility Commission Director Connie Corona also highlighted that the state does not maintain a complete inventory of all data centers in Texas, suggesting that many operators may not have been contacted by state agencies. The recent hearing in Austin provided limited new insight into the current water usage of data centers but did preview a range of legislation expected next year targeting these facilities.
Proposed legislative changes discussed by lawmakers included repealing a sales tax exemption that has allowed data centers to save billions of dollars, implementing water use limits, and establishing noise restrictions. Sen. Adam Hinojosa, a Republican from Corpus Christi, secured tentative pledges from officials representing Google, Lancium, and Blackstone subsidiary QTS Data Centers to support some new legislative restrictions, including water use limits.
Data centers require significant amounts of water primarily for cooling their high-powered computer chips. The exact amount of water used depends on the cooling system in place. Officials from QTS, Google, and Lancium testified that their companies have adopted closed water-cooling systems, which consume considerably less water than older systems. However, even with efficient cooling, the vast power requirements of data centers can still drive substantial water usage.
University of Texas at Austin researchers testified at the hearing, estimating that approximately 60% of the water use associated with data centers occurs at the power plants that generate their electricity. These researchers also projected that data centers could account for about 5% of the state’s total water usage by 2030.
Looking ahead, local law enforcement agencies and district attorneys may initiate criminal investigations into non-compliant data center companies. Additionally, lawmakers are expected to introduce new legislation addressing data center operations in the upcoming legislative session.
