Soaring electric bills are sparking grassroots anger at data centers, spurring promises from lawmakers and the Trump administration to make tech companies pay for their own energy costs.
But there’s another big ticket item roiling the debate over data centers: Who will pay for water and sewer infrastructure?
Data centers that use water to cool servers can consume millions of gallons during a single hot summer day. And as more projects tap into local water systems, some utilities are planning major expansions to handle dramatically increased demand.
Water worries have spurred two communities in arid Arizona to reject data center proposals amid intense public pushback. And even in wetter areas, water costs have sparked public opposition to the booming industry that fuels artificial intelligence.
But it’s unclear, experts say, how AI’s rise is affecting household water bills. The debate comes as the historically underfunded water sector faces growing pressure from climate change and as affordability is top of mind for many Americans. Given the shifting AI landscape, data center skeptics are also questioning whether the facilities could change their designs or become obsolete before water investments are paid off.
“There is a real need to understand the impact on water rates and make sure households aren’t footing the bill,” said Melissa Scanlan, director of the Center for Water Policy at the University of Wisconsin-Milwaukee.
Data center water use varies considerably, with those that use more water typically requiring less electricity. Researchers at the University of California, Riverside, recently estimated that it will cost between $10 billion and $58 billion to build the water infrastructure needed for AI data center growth through 2030.
One city confronting the issue is Columbus, Ohio. The metro area has become a booming tech hub, with at least 130 data centers operating, several others proposed and a water-intensive semiconductor manufacturing plant under construction.
That growth — along with projections about worsening drought and a booming population — has spurred Columbus Water and Power to expand its capacity for treating water, hunting for new water sources and exploring the use of recycled wastewater from sewage plants.
This year, the Columbus Water and Power will increase water rates 18 percent and sewer rates 8 percent, as the utility tackles capital projects. It is also studying whether large water users like data centers are paying their fair share in costs.
“Large load users impact our water capacity,” Columbus City Council member Christopher Wyche said. “As we have rate discussions every year related to water and sewer capacity fees and rates, more and more residents are bringing up data centers as the driving force behind that cost increase.”
Data centers so far consume a small percentage of drinking supplies in the Columbus area, said John Newsome, water department administrator for Columbus Water and Power. The utility serves 1.4 million customers.
The Ohio Environmental Protection Agency projected in a sweeping study last year that industrial water demands will increase 120 percent across central Ohio between 2021 to 2050. The study also warned of potential water supply and treatment capacity shortfalls by that same year absent major investments.
“I don’t think it’s fair from our ratepayers to be paying for improvements for a data center. I’ll be straightforward on that,” Newsome said. “What we try to do on the water side is make sure we’re planning well based on projected demands.”
Test case
Efforts to address data centers’ impacts on consumers have thus far centered on energy. In February, the White House unveiled a “ratepayer protection pledge,” a nonbinding agreement imploring tech companies to pay for grid investments for AI data centers, and multiple bills on the topic have been introduced in Congress.
Unlike the investor-owned utilities that dominate the electric grid, most water utilities are small not-for-profits dealing with historically underfunded infrastructure. While the water sector got an infusion of federal funding from the 2021 infrastructure law, that money will expire at the end of September, providing less cushion for water utilities as AI build-out continues.
“Water is a hyperlocal resource,” said Shaolei Ren, an associate professor of electrical engineering at UC Riverside and corresponding author on the report on water costs. “Typically, this infrastructure is sized based on population growth, and if you have a large data center, their [water] demand can easily exceed that of the local municipal population for future growth.”
Data centers usually pay for their water infrastructure in the same way as any other utility customer, covering direct costs like new water and sewer lines connecting to existing infrastructure.
But things can get more complicated if larger investments, such as a new reservoir, are also needed to meet demand driven in part by data center growth, said Adam Carpenter, senior manager of environmental policy at the American Water Works Association. The trade association represents thousands of water utilities nationwide.
Data centers’ water use also isn’t uniform, with the facilities requiring the most water on hot days when households and other businesses also use more.
“The difference with this issue is [the growth] is happening so fast that it kind of needs to be applied in new ways,” Carpenter said. “There’s not as long of a history of understanding how much the impact of a new data center has on a system.”
In rural Botetourt County, Virginia, outside Roanoke, a planned Google data center has drawn scrutiny over its projected water use. It’s also motivated local officials to accelerate plans to find new sources of water.
The data center campus would use up to 2 million gallons of water a day, with the potential to expand to 8 million gallons. Google is paying for all water costs at the site, including new water lines and pumping stations that could be needed, and could draw water from Carvins Cove, a drinking water reservoir that is also a popular recreational spot.
“Any water use would be pursued under existing regulatory requirements and in coordination with [the utility] to protect the region’s water supply,” Google spokesperson Devon Smiley said in an email. “The high quality of water in Botetourt County will allow us to circulate it multiple times through our cooling system, which significantly reduces the amount of water needed for operations.”
But an agreement between Botetourt County and the local water utility asserts that the project’s water consumption could limit available supply for other customers and impair future development. To avoid that outcome, the county will contribute up to $300 million for a regional study to identify new water supplies.
County officials have said that tax revenue from Google’s data center will make up for taxpayer dollars going toward the water supply study. The utility, Western Virginia Water Authority, has also asserted that the study will benefit the whole region in the long term.
Neither entity responded to questions for this story. Meanwhile, Virginians are pressing officials about potential impacts on water costs, supplies and Carvins Cove.
“We still have a lot of questions,” said Julie Bivins, who lives in Roanoke and is a member of the Southwest Virginia Data Center Transparency Alliance. “Much of Botetourt County is on wells, so there’s not even a whole lot of people who use this water, and yet they’re going to be paying for this new water source. So that doesn’t sound great.”
Smiley said the company is still considering its options for cooling the data center and is paying for a “preliminary” water supply study. Google is also funding a research initiative for Carvins Cove, she said.
Because of water constraints, some tech companies are now building data centers that use very little water, but are highly energy-intensive. Google and some other players have also set goals to replenish more fresh water than they consume.
Regardless of how data centers are designed, the industry is committed to paying for the water it uses and “incremental costs for additional infrastructure” for data centers, Dan Diorio, vice president of state policy at the Data Center Coalition, said in a statement.
“The industry continues to invest in water management and deploy water efficiency practices through air-cooled systems, closed-loop and water-free cooling, the use of outside air as conditions allows, and dry cooling technologies.”
Ren, the UC Riverside professor, said companies should use water to cool data centers if supplies are available, as it’s more energy-efficient overall compared to zero-water cooling. But they should also commit to covering the full cost of water investments, especially considering the potential mismatch between the life of a data center and water infrastructure, he said.
“The water infrastructure will be used for 50 or 60 years, but the data center is only designed for 15 or 20 years,” Ren said. “So there is a long-term planning process that needs to be seriously considered.”
