Texas to Penalize Data Centers Over Water Use Reporting Failures

Texas Governor Greg Abbott has directed the Texas Water Development Board (TWDB) to impose legal consequences on data centers and other large water-consuming entities that fail to comply with water use reporting requirements. The move comes as the state, a rapidly expanding hub for artificial intelligence infrastructure, undertakes a broader overhaul of how it regulates server warehouses.

Abbott's office stated that major water users, including data centers, appear to have committed civil and criminal violations by not providing the TWDB with required information about their water usage. The directive was issued on Monday.

The TWDB is currently attempting to survey data centers about their water consumption and expected future use. Facilities that do not return the survey by the deadline will be denied new or renewed environmental permitting necessary for their operations.

Texas has already paused the connection of new data centers to the state electrical grid while it reviews the facilities' power and water use, among other issues. The state's aggressive stance reflects growing concerns over the resource demands of the AI boom, particularly in a region prone to water scarcity.

The penalties would apply not only to data centers but also to other large water-consuming entities that fall under the reporting requirements. The TWDB's survey is intended to gather data on both current and anticipated water use, as state officials seek to balance economic growth with resource management.

No specific timeline for the penalties or further details on enforcement mechanisms were provided in the announcement.