A tidal wave of data centers is heading for Texas. Just don’t expect the state water plan to mention it.
State agencies have only recently started seeking information about how much water data centers could use in some of Texas’ driest regions. And a landmark 2025 state law includes no stipulations for how to track or manage data center water use.
The result: A draft water plan for 2027 that does not allude to data centers — and probably won’t until there’s a new draft in five years.
Conversations about data centers across the country often focus on the massive amounts of electricity that industrial buildings use. But concerns about water are growing as local stress points arise, including in a small Georgia town that saw 30 million gallons of water go missing. In growing Sun Belt states and beyond, leaders are starting to look at how data centers and their need for cooling could affect water costs and supplies, especially in regions prone to drought.
“The water issue is one that wasn’t at the forefront initially, and then really kind of came onto the scene because we spent a lot of time talking about electricity,” Thomas Gleeson, chair of the Public Utility Commission of Texas, told state lawmakers last month. “Water is a really scarce resource in this state and so we have to have a clear picture of what these facilities use on the water side.”
Even without accounting for water used by data centers, the draft 2027 water plan released in April estimates that Texas will need to spend $174 billion over the next 50 years on projects to stave off regional water crises. Texas has hundreds of data center locations operating or in development, second only to Virginia among U.S. states, as companies seek to help power artificial intelligence.
More than 65 percent of Texas was in a drought as of May 12, and the Texas Water Development Board estimates the state’s existing water supplies — those that could be relied on during a drought — could decrease by 10 percent between 2030 and 2080. But the data center boom’s impact on water supplies wasn’t include in the board’s 2027 draft water plan because the agency uses historical data to plan for future needs.
A Gallup poll released last week found that 7 in 10 Americans oppose construction of a data center in their local area, with water usage listed as one of the top concerns for those against local developments. Multiple states have been working to pass rules and regulations related to data centers’ water use as the industry struggles with public opinion issues.
South Carolina lawmakers are considering a bill that would require regulators to study proposed data centers’ water consumption and sourcing before they could be built. And Republican Florida Gov. Ron DeSantis signed a bill this month that bars water management districts from issuing permits to “large-scale data center” applicants if their water use is “harmful to the water resources of the area.”
Researchers at the University of Texas, Austin, estimate that data centers could account for more than 9 percent of Texas’ total water use by 2040, or potentially more water than the oil and gas industry is projected to use for production that same year.
The office of Texas Republican Gov. Greg Abbott, a vocal advocate of data center growth, did not immediately respond to a request for comment Tuesday. Abbott appoints members of the PUC and the Texas Water Development Board.
Rachel Hanes, a policy director with the Greater Edwards Aquifer Alliance, said data center requests are likely to keep piling up until the Legislature convenes for its 2027 regular session.
“It’s just popped up so fast and changed so fast, even in between the time of the start of the last legislative session and now that the state is running really behind,” Hanes said.
Data center developers are embracing cooling technologies that use less water — including closed-loop systems that suck up millions of gallons one time but require minimal water after the initial withdrawal.
Dan Diorio, vice president of state policy for the Data Center Coalition, pointed to a Virginia legislative audit that found 83 percent of data centers used the same amount of water — or less — as an average large office building in 2023. He said data centers should be compared to other industrial users, like manufacturers or oil refiners, instead of being put in a class of their own.
“What the data very clearly shows is that this is one of the most efficient water users throughout the economy,” Diorio said. “I think it’s important to level-set as to, where does the data center industry stack up in terms of other industries?”
Relying on history
Texas’ state water plan — published every five years — is the backbone of the state’s water outlook, especially for droughts.
The plan identifies potential water supply needs and shortfalls during droughts, said Temple McKinnon, director of water supply planning at the Texas Water Development Board.
“It’s used by local elected officials to see what challenges they might be facing under such conditions in the future,” McKinnon said.
Analysts rely on historic data to forecast future water needs and supplies, and McKinnon said most of the data included in the 2027 draft plan is from 2020. The most recent regional data included in the plans is from before fall 2024, when regional water planning groups published their draft regional water plans.
But the historic water figures used by both regional planning groups and the water development board do not capture the growing use of water by data centers. And the 2032 water plan will likely use data center water usage figures from 2026 and 2027 — before a number of new data centers are expected to start coming online between 2028 and 2032, according to the Electric Reliability Council of Texas, the state’s main power grid operator.
McKinnon said the state’s water plan is a living document — and that amendments can be filed to it as new information arrives. The draft 2027 state water plan is open for public comments through May 29, and the state water board is expected to vote on whether to adopt it in July.
Using historical data to plan for the next 50 years of water usage makes it practically impossible to account for things like rapid population growth or a new industry that uses a lot of water, according to Hanes with the Greater Edwards Aquifer Alliance.
“Having it be historical water use does not account for the changes in specific industries themselves, which would be a problem if they even accounted for data centers in the first place, which they don’t,” Hanes said. Other state agencies are now seeking to get more information on data center water usage.
The Texas PUC has sent data center project developers a voluntary survey asking them about how much water they plan to use and what sources they plan to tap. It’s unclear how much data might be released publicly, though Gleeson said lawmakers and the water development board could see the results.
But Hanes said the survey will mean little if the data isn’t made public.
Republican Lt. Gov. Dan Patrick released new interim charges for the Texas Senate to study in March, including one to assess the water demands of “energy-intensive technologies,” including data centers. Patrick’s office did not immediately respond to a request for comment Tuesday.
State Sen. Charles Perry — a Lubbock Republican who chairs the Senate’s Water, Agriculture and Rural Affairs Committee — said in an interview that he and other lawmakers plan to propose guardrail bills about data center water usage during the 2027 legislative session.
But he said he’s confident that new data centers that are aiming to come online in Texas won’t be water hogs. “Their water use is significantly less than the narrative out there,” Perry said. “The technologies out there are better and more efficient.”
Data centers mainly use water for cooling their massive computing infrastructure.
Diorio said most of the data centers being built now rely on air cooling — which uses virtually no water — or closed-loop systems that can withdraw a few million gallons when they initially come online but only use minimal water after that.
Some, however, use what’s known as evaporative cooling, which uses water evaporation to cool the air. Larger data centers that use evaporative cooling can use millions of gallons every day — enough water to supply a small town.
‘Death by 1,000 cuts’
It’s not clear how cooling technologies are used at data centers across Texas, although the bottom line matters.
“From a data center perspective, using water inefficiently is not something that works within the business model,” Diorio said. “Cooling servers, using energy, using water — these are some of your biggest operating expenses that you have. Not to mention your reputation.”
But technologies that use less water in their cooling systems also can require more electricity to operate. And that extra power almost always requires a lot more water.
The Sierra Club’s Lone Star Chapter recently published a report finding that data centers’ biggest water impacts will come through the massive amounts of electricity they’ll require. Power generators, especially those that run on coal and natural gas, use large quantities of water for steam and cooling during the generation process.
ERCOT, the main grid operator in Texas, has projected that data centers could bring more than 228 gigawatts of demand onto the grid by 2032. The all-time high demand for all power users on the ERCOT grid — from residents to major refineries and manufacturers — was 85.5 GW in 2023.
Rising power demand from data centers is helping to expand the life of coal and natural gas power plants across all of Texas, which account for a combined 79 percent of the state power sector’s water usage in 2024, according to the report.
The Texas power sector is forecast to consume about 3.8 percent of the state’s water demand by 2030, according to the draft 2027 state water plan, up from 3.5 percentin 2023. The number could rise as more generators and data centers are built.
“If they’re paired with a [natural gas] turbine or a nuclear plant or the Texas grid itself, that is going to have additional water usage because of the water being used directly on site [for cooling], but also induced water demand because the energy demand is so high,” said Margaret Good, vice president of water and community resilience at the Houston Advanced Research Council.
Diorio said data centers can’t control what type of generation the grid favors. Plus, he said, newer natural gas turbines are more efficient than those that have been plugged into the grid for years.
“At what point are you saying death by 1,000 cuts?” Diorio said. “You’re telling us we can’t get on the grid because we’re going to stress the grid. So we [build our own generation] — well now you’re digging us on that. We’re using a closed-loop for cooling, but, oh, now there’s this issue.”
Because Texas’ existing water problems vary widely from place to place, new data centers could have an outsize impact depending on their location, Cyrus Reed, conservation director of the Sierra Club’s Lone Star Chapter, said on a recent webcast.
“If you’re in one of the locations where water is scarce, it’s a huge amount,” Reed said.
But Perry said data centers could help bring new sources of water online, especially in parts of West Texas and the Texas Panhandle where freshwater resources are scarce.
Perry said two data center developers in his district have floated the idea of building desalination plants so they can use the brackish groundwater found throughout the region. Developers have offered, he said, to sell some of that water at a discount to local water utilities — potentially unlocking a new source of water rural communities would be unable to afford on their own.
“I don’t care if communities take or leave [data centers] — that’s their call,” Perry said. “But if this thing can come to fruition, if we can have more water supplies built out, that’s a 50-year win.”
Mike Lee contributed to this report.
