Key facts
- Texas Governor Greg Abbott ordered regulators to penalize data centers for water use reporting violations.
- Data centers and other large water consumers failing to report usage may face civil and criminal violations.
- Failure to comply with water use surveys will result in denial of new or renewed environmental permits.
- Texas is reviewing its regulations for data centers, which are rapidly expanding in the state.
Texas Governor Greg Abbott has directed state regulators to impose legal consequences on data centers and other large water-consuming entities that fail to comply with water use reporting requirements. The governor's office stated that these major water users appear to have committed civil and criminal violations by not providing the Texas Water Development Board (TWDB) with required information about their water usage.
The state is currently overhauling its regulations for server warehouses, a sector experiencing rapid growth in Texas, particularly for artificial intelligence infrastructure. In 2025, Texas data centers consumed an estimated 25 billion gallons of water, according to the Houston Advanced Research Center. Water use by data centers in the state could rise to 161 billion gallons a year by 2030 – about 2.7% of all water used in Texas, or roughly the amount consumed by 1.3 million households across the country. The Texas Water Code requires a complete and accurate water use survey.
Abbott said projects that fail to complete the audit will be denied permission to connect to the state’s power grid. The audit requires data centers to provide information about their water consumption, water sources and efforts to use water-efficient technologies. Abbott also issued a directive last month ordering the Public Utility Commission of Texas and the Electric Reliability Council of Texas (Ercot) to conduct a comprehensive audit of data centers advancing through the Ercot interconnection process. TWDB must coordinate with PUC and ERCOT to ensure that covered entities provide critical water use information in response, and any failure to respond to the audit’s request for water use information would trigger TWDB’s independent enforcement authority.