Dozens of data center operators across Texas could face legal scrutiny after failing to comply with mandatory state reporting requirements regarding their water consumption, officials disclosed during a legislative hearing.

State regulatory bodies tracking utility and environmental resources reported widespread noncompliance with formal information requests, highlighting persistent transparency issues surrounding the sector’s rapid expansion statewide.

High Rates of Noncompliance

During testimony before a Texas Senate committee, representatives from state agencies revealed low participation rates:

• Texas Water Development Board (TWDB): Only 97 of 324 surveyed facilities provided answers—a response rate below 30%, according to Temple McKinnon, the agency’s water supply planning director.
• Public Utility Commission (PUC): PUC Director Connie Corona testified that fewer than half of the operators her agency contacted submitted the requested records.

McKinnon noted that entities ignoring TWDB inquiries could face criminal misdemeanor penalties, though enforcement decisions rest with local prosecutors and law enforcement. Whether any jurisdictions have launched formal inquiries remains unconfirmed.

Corona also indicated that the state lacks a comprehensive registry of all operational data centers, meaning several facilities likely never received disclosure requests.

Political Backlash and Local Strain

The rapid influx of data center development has emerged as a central point of debate leading into the next legislative session, drawing sharp criticism from rural jurisdictions experiencing resource pressures.

“There’s not a bigger issue going on right now in Texas,” said Rick Thompson, program director for the County Judges and Commissioners Association of Texas, noting that regional public discourse often suffers from inaccurate or missing data.

In response, lawmakers are drafting several measures to increase oversight, including:

• Ending substantial sales tax exemptions that currently save operators billions in development costs
• Imposing strict consumption caps on municipal and groundwater supplies
• Establishing statutory noise limits on continuous facility operations

Sen. Adam Hinojosa, R-Corpus Christi, secured preliminary agreements from representatives of Google, Lancium, and Blackstone-owned QTS Data Centers to back certain regulatory curbs, including water limits.

Water Demand Tied to Power Generation

Data facilities rely on water primarily to dissipate heat from dense computing hardware. While representatives from Google, Lancium, and QTS stated their facilities deploy modern, closed-loop cooling configurations to reduce on-site consumption, overall utility draw remains substantial.

According to University of Texas at Austin researchers who testified Tuesday, indirect water use represents the bulk of the industry’s footprint. Approximately 60% of data center-related water consumption occurs off-site at thermoelectric power plants generating the grid electricity they consume.

University analysts project that data center demand could make up roughly 5% of Texas’ entire water consumption by 2030.