Key facts
- Cities across the U.S. are enacting bans or moratoriums on new data centers.
- Austin, Texas, is drafting new rules to restrict or exclude data centers.
- A study found power plants serving data centers withdraw 3.4 trillion gallons of freshwater annually.
- 66% of power plants in seven key states are exposed to medium to high water stress.
- Other cities like San Marcos, Texas, Durham, North Carolina, and Jersey City, New Jersey, have also implemented restrictions.
Cities across the United States are increasingly imposing restrictions on the development of AI data centers, driven by growing concerns over the strain these facilities place on local water supplies, electricity grids, and land use. Austin, Texas, has become the latest municipality to take action, with its City Council unanimously voting to draft new regulations that could limit or prohibit new data centers.
The vote in Austin was prompted by a recent study from Ceres, which analyzed the water consumption of power plants that supply electricity to data centers in seven states—Virginia, Texas, California, Illinois, Georgia, Ohio, and Arizona—which collectively host about half of the nation's data centers. The study revealed that these power plants withdraw approximately 3.4 trillion gallons of freshwater annually, a volume that significantly exceeds the average annual urban water demand of California and is roughly 12 times the combined annual water use of major cities like Los Angeles, Phoenix, and Washington, D.C.
According to Kristen James, senior program director for water at Ceres, the study found that 66% of the power plants drawing water in these states are located in areas experiencing medium to high water stress. The study differentiates between water withdrawn and water consumed, noting that water lost through evaporation or other processes is not immediately available for reuse.
Austin officials are now tasked with developing changes to the Land Development Code to define data centers and implement safeguards, with the first phase of the ordinance expected for consideration in December. Public Citizen, a consumer advocacy group, praised Austin's local leadership, contrasting it with what they described as insufficient voluntary measures from Texas state leaders.
Austin's move aligns with a growing trend of local opposition to data centers. In June, San Marcos, Texas, used its zoning laws to bar data centers, while Durham, North Carolina, and Cave City, Kentucky, have enacted moratoriums. Jersey City, New Jersey, recently banned data centers as a primary use for industrial properties. This heightened opposition has also led to protests, with at least 37 individuals detained during AI data center demonstrations in 2026 so far.
Beyond local ordinances, state legislatures are also addressing the issue. In April, Maine lawmakers passed a bill for the nation's first statewide moratorium on large data centers, though Governor Janet Mills vetoed it due to an exemption for a specific project. She has since established an advisory council to study data center policy. Pennsylvania has also implemented new requirements for large data centers, mandating annual water and energy reporting.