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One would think data centers would love data, but it turns out many are opposed to sharing data about their water use.
That’s what Texas lawmakers discovered during a recent House hearing examining the demands data centers place on the state's water supply.
Lawmakers said the state's lack of reliable data on water use by the rapidly growing data center industry is making it harder to plan for future water shortages.
Data centers, which support artificial intelligence, cryptocurrency mining and everyday digital services, can require large amounts of water and electricity. But testimony before the Texas House Natural Resources Committee showed that most of the facilities surveyed by the state have not reported their water use as required by law.
“Data centers have become a hot-button issue, dominating social media feeds and news reports,” said state Rep. Cody Harris, the committee’s Republican chairman.
Harris said nearly everyone relies on data centers, whether checking a map or scrolling through social media. But, he said, the rapid development of industrial-scale facilities is causing conflicts in communities, particularly when companies do not disclose their demands on local water and electricity systems.
“When new developers like Diode Ventures enter a residential neighborhood intent on building a new data center and refuses to do any community town halls, refuses to discuss their water and electricity usage, and refuses to testify before this committee, then Texans rightfully get upset,” said Harris.
Harris said representatives from Diode Ventures and Calypso declined invitations to testify before the committee.
“They didn’t decline due to scheduling conflicts or any other acceptable reason,” Harris said. “They just simply didn’t want to face tough questions.”
He said companies that refuse to engage with communities are increasing public suspicion of the industry. Harris also cautioned that data centers do not all use water in the same way.
Some facilities use evaporative cooling systems that can consume substantial amounts of water. Others use closed-loop systems or rely more heavily on air-cooling, potentially reducing direct water consumption but increasing electricity demand.
Electricity generation can also require water, making it more difficult to calculate the industry’s total water footprint.
Temple McKinnon, water supply planning director for the Texas Water Development Board, told lawmakers that the agency’s survey does not collect enough facility-level information to determine how water use is divided among cooling, on-site electricity generation and other operations.
“Our survey doesn’t get into that level of facility detail,” McKinnon said.
The state collects information about the total amount of water entering a facility. But it cannot connect each data center’s electricity consumption with the water used by power plants supplying the electric grid.
The more immediate problem, lawmakers said, is the low survey response rate.
The number of data centers identified by the Water Development Board increased from 22 in its 2023 survey to 341 in the survey covering 2025. At the time of the hearing, about 17% of those facilities had responded.
McKinnon said 98% of responding facilities reported purchasing water from public water systems, while about 2% were self-supplied.
Of the water reported by responding facilities, about 89% came from surface water sources, including rivers and reservoirs, and about 8% came from groundwater.
Lawmakers said the figures cannot accurately describe the entire industry when more than four out of five surveyed facilities have not responded.
State Rep. Brad Buckley, a Republican, asked whether the information was being used to prepare the state water plan, which projects Texas’ water needs and supplies over the next 50 years.
McKinnon said it was.
“So we’re building a state water plan off of a 17% response rate. Is that an overstatement?” Buckley asked. “I mean, that is a terrible response rate,” Buckley said.
McKinnon said the agency uses other sources when companies fail to respond, including municipal water sales, previous consumption records and commercial databases that track data center development.
“It’s kind of like — I like to call it forensic accounting, in a way,” McKinnon said. “We ask these folks to report directly, but we’re also looking at many other methods to assess water use.”
Data centers are legally required to respond to the state survey. Failure to do so can be prosecuted as a Class C misdemeanor.
The Water Development Board, however, does not enforce the reporting requirement. Testimony indicated that enforcement would have to come from local prosecutors or another government authority.
Harris said lawmakers could strengthen disclosure and enforcement requirements when the Texas Legislature returns for its next regular session.
“The transparency of utilization of resources shouldn’t be optional,” Harris said. “And I think that that’s just kind of a low bar that we’re going to be looking to set next session — disclosing how much water is used and the source of it.”
The lack of information could be especially consequential in rural areas where groundwater pumping is not regulated by a groundwater conservation district.
State Rep. Trent Ashby, a Republican, asked whether a data center in a county without such a district could drill a well and pump groundwater without a local entity regulating the withdrawal.
McKinnon confirmed that it could.
“There is no requirement or obstacle, if you’re a data center, to overcome to pump as much groundwater as you want. Am I correct?” Ashby asked.
“There would be no entity in place to regulate that use, yes,” McKinnon said.
A large facility in an unregulated area could draw water from the same aquifer that supplies nearby homes, farms and small public water systems without the metering or pumping limits that might be imposed in another county.
“That’s a broken system,” Ashby said. “When you’re talking about massive water usage — especially groundwater — and the state can’t calculate how much water is being used, I think we can all understand why Texans are rightfully concerned.”
Texas is already projecting significant water shortages in the coming decades as rapid population growth drives up demand while drought, aquifer depletion and declining reservoir capacity reduce reliable water supplies.
Many of those projections were developed before the recent data center boom. Lawmakers said that without more complete information about the industry’s water consumption, Texas cannot accurately determine how the expansion of data centers could affect communities already facing limited water supplies.
