Texas Data Centers: Only 17% Report Water Usage, Raising Serious Concerns for State Planning
Texas is in the midst of an unprecedented data center boom, driven by surging demand for AI, cloud computing, and digital infrastructure. The state now hosts around 341 data centers— a dramatic jump from just 22 in 2023. Yet as these facilities proliferate, critical data on their impact on Texas’s already strained water resources remains largely unavailable due to alarmingly low reporting rates.
At a recent Texas House Committee on Natural Resources hearing, officials from the Texas Water Development Board (TWDB) revealed that only 17% of the state’s data centers responded to the 2025 annual water use survey. This statutorily required survey gathers vital information on groundwater, surface water, and reused water consumption from large industrial users.
TWDB water supply planning director Temple McKinnon testified that the poor response rate leaves planners with an incomplete and unreliable picture. Lawmakers voiced clear frustration, with one stating, “We’re building the state water plan off a 17% response rate.”
Why Data Centers’ Water Use Is a Growing Issue
Data centers require massive amounts of water, primarily for cooling power-intensive servers. As artificial intelligence and high-performance computing expand, evaporative cooling systems pull heavily from local water sources.
Current estimates show Texas data centers consume roughly 25 billion gallons of water per year (including indirect use through power generation), equating to about 0.4% of the state’s total water use. Projections indicate this could climb to 29–161 billion gallons by 2030 (0.5–2.7% of total use), and potentially 3–9% of Texas’s annual water supply by 2040—rivaling or surpassing sectors like oil and gas in some scenarios.
Among facilities that did respond, 98% pull water from public systems, with the majority sourced from surface water like rivers and reservoirs. However, with more than 80% of data centers failing to report, these numbers almost certainly understate the real impact—particularly in drought-prone, fast-growing regions already balancing agriculture, industry, population growth, and residential needs.
Legislative Response and Enforcement Gaps
The Public Utility Commission of Texas (PUC) ran its own survey earlier in 2026 on water and energy use for data centers and crypto operations. It received responses from 28 companies covering 92 facilities—better than the TWDB rate, but still less than a third of all sites.
During the hearing, lawmakers pushed for greater transparency and accountability. Although reporting is required by law, enforcement remains weak: the maximum penalty for non-compliance is just a $500 fine. There are growing calls for stronger mandates, improved inter-agency coordination, and meaningful inclusion of data center water projections in the 2027 State Water Plan, which currently lacks robust data.
Massive Implications for Texans
Texas already contends with variable rainfall, aging infrastructure, and rising demand. Data centers tend to cluster in specific areas, intensifying local pressure on public water supplies and wastewater systems. Indirect water consumption tied to electricity generation often exceeds on-site cooling, adding another layer of complexity.
Residents and critics highlight hidden costs: higher utility rates, strained local resources, impacts on property taxes, and potential effects on community water access. While proponents emphasize economic benefits and job creation—and many operators are adopting more efficient technologies like air cooling or recycled water—the lack of comprehensive reporting makes responsible planning nearly impossible.
As one lawmaker stressed, building long-term water strategy on such partial data undermines the entire effort.
Recommended Path Forward
The hearing reflected bipartisan concern over this data gap. Sensible next steps include:
• Stronger enforcement with meaningful penalties for non-reporting.
• Standardized metrics such as Water Usage Effectiveness (WUE).
• Greater public disclosure of aggregated water consumption data.
• Incentives for water-efficient cooling and pairing with renewable energy to reduce indirect use.
As Texas continues to court tech investment, striking the right balance between economic growth and sustainable resource management is essential. Full transparency on water usage is the critical first step toward ensuring the state’s water future isn’t built on guesswork.