Texas leaders are threatening to enforce rules against data centers that did not disclose their water consumption, with Gov. Greg Abbott and Attorney General Ken Paxton pointing to existing reporting requirements. Yet the law's penalty tops out at $500.
For a business sector building some of the state's biggest, most resource-intensive facilities, that ceiling amounts to little.
Here's what to know
Each year, large water users in Texas — including data centers that consume more than 10 million gallons annually — are supposed to file water-use surveys used in the state's 50-year planning process. But, as The Texas Tribune reported, participation has stayed low even as the industry grows quickly.
The Texas Water Development Board surveyed 329 data centers in 2025, and only about 30% responded. From 2020 through 2025, the state identified 334 unique facilities, and 233 never submitted the requested survey.
Under state law, violators can face a Class C misdemeanor with a fine of up to $500, lose eligibility for certain state water funding, and possibly have some environmental permits withheld.
Kathryn Guerra of Public Citizen, who leads a watchdog campaign, said, "The governor is like, 'Let's enforce the laws on the books that weren't being enforced.' That's not much in the way of incentive."
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Some industry representatives have said the issue is more complicated than companies simply refusing to respond. Cameron Poursoltan, director of energy policy for Texas for the Data Center Coalition, said the organization has worked with TWDB to resolve "significant contact information and data discrepancies that contributed to the TWDB Water Use Survey's initial lower response rate."
More background
Because so many surveys are missing, Texas still lacks a full accounting of how much water this fast-growing industry uses. The water board said the reporting gap left it without enough information to include data center water use in projections for the 2027 state water plan, according to the Tribune.
What has been reported already suggests a substantial footprint. Seven facilities reported more than 144 million gallons combined in 2023. In 2024, 19 facilities reported more than 660 million gallons. In 2025, 97 facilities reported 1.4 billion gallons combined — and that figure covers only the companies that responded.
Water use is only one part of the debate, which is also tied to AI expansion and strain on the electric grid. Data centers are critical infrastructure for many AI tools. While AI can help utilities forecast demand and integrate cleaner energy more efficiently, these facilities also require enormous amounts of electricity and cooling water.
Abbott has already recommended that data centers cover their own electric infrastructure costs, use less water-intensive cooling systems, and add power generation to the Texas grid.
Public concern has also grown alongside that demand for resources. An August University of Texas/Texas Politics Project poll found that 57% of Texas voters opposed building a data center in their community; 75% of registered Democrats opposed it, while Republicans were almost evenly split.
What's being done?
Abbott has directed the water board to alert county and district attorneys to facilities out of compliance, and Paxton has opened an investigation into hundreds of data center developments across multiple Texas counties, the Tribune reported.
Andrew Mahaleris, Abbott's press secretary, said, "No other state agency will approve data centers until the Public Utility Commission, ERCOT, and the Water Development Board have the information they need to make informed decisions."
Even so, the state's leverage appears narrow. The water board said it cannot prosecute violations on its own, and Paxton cannot independently bring local criminal cases unless a district or county attorney requests or appoints him. Data centers typically do not qualify for the state water funding officials have threatened to withhold.
Some companies are trying to present a different model. A Meta spokesperson said that the company submitted the survey for its Fort Worth facility and that its Texas data centers use "water-efficient cooling" while it funds projects aimed at restoring hundreds of millions of gallons annually.
Without stronger reporting, lawmakers could reach the January 2027 legislative session without the information needed to improve oversight.
"If we don't have a full picture, then how are we supposed to go into the legislative session and make meaningful laws to protect folks?" Guerra said, per The Tribune.
Where can I learn more?
Officials and residents across Texas and beyond are grappling with data centers' growing demands for water and power.
• One Texas resident warned data centers could drain local water supplies and raise power bills.
• In New Mexico, officials urged a data center moratorium over AI water and air impacts.
• In Endicott, New York, leaders considered a 12-month pause on AI data centers as water and energy fears grew.
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