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On Tuesday, the Amarillo City Council voted 4–1 to approve a water supply agreement with Fermi America, marking a significant step forward for what officials have described as one of the largest private energy and technology projects ever proposed for the Texas Panhandle. The agreement authorizes the city to provide up to 2.5 million gallons of water per day to the company for its planned 5,800-acre advanced energy and data campus east of Amarillo.
The vote followed weeks of public debate and months of negotiations between the city and Fermi, Inc., which is partnering with the Texas Tech University System to develop what representatives have called “the largest advanced energy, private grid and intelligence development in the world.” The project is expected to integrate natural gas, solar, wind, and nuclear power generation to achieve an eventual capacity of up to 11 gigawatts of energy.
Council Approves Agreement, One Dissent
The measure passed with a 4–1 vote, with City Councilmember Les Simpson, Place 4, serving as the lone dissenting voice. Simpson said he supported the city’s commitment to economic growth but questioned the rate and structure of the water deal, warning that the city may be selling a valuable resource too cheaply.
“The agreement currently lacks mechanisms to hold Fermi accountable for the commitments it has made,” Simpson said after the first reading of the proposal earlier this month. “The final document should ensure that transparency, stewardship, and partnership are not just promises—but ongoing responsibilities embedded in the agreement itself.”
Simpson reiterated those concerns during Tuesday’s meeting, urging city staff to include stronger accountability provisions.
Mayor Cole Stanley and other councilmembers defended the agreement, saying it strikes a balance between supporting economic development and protecting city resources. Stanley said the project was brought to his attention roughly three months ago and that city staff have worked since then to determine what level of water service could be responsibly provided.
The final deal sets a “maximum not to exceed rate” of 2.5 million gallons per day—significantly lower than early discussions that envisioned up to 10 million gallons. The rate Fermi will pay, according to city officials, was negotiated at approximately $8.72 per 1,000 gallons.
Public Input: Support and Skepticism
The council chamber was again filled Tuesday with residents and stakeholders—some in support of the deal, others deeply skeptical.
Supporters argued that Fermi’s project represents a generational opportunity for Amarillo, potentially bringing high-tech industry, high-paying jobs, and global attention to the region. They pointed to the company’s partnership with Texas Tech University as a major educational and research advantage for local students and professionals.
However, many residents and environmental advocates voiced concerns about the project’s potential impact on Amarillo’s most precious resource: water. The city draws from the Ogallala Aquifer, a source already under stress from decades of agricultural and industrial use.
Critics said they fear the project could accelerate depletion of groundwater reserves, especially during prolonged droughts. Others questioned whether the city was transparent enough in its negotiations with Fermi, noting that early discussions were held behind closed doors.
“I want to see Amarillo grow,” one resident said during public comment, “but we have to be sure we’re not giving away our future for short-term gains.”
Fermi’s Plans and Environmental Assurances
Representatives from Fermi America sought to ease those concerns, emphasizing that the company is committed to sustainability and regulatory compliance. During the Oct. 14 city council meeting, officials from Fermi explained that the facility will initially draw no more than 2.5 million gallons per day and that the company will work to reduce its water demand over time.
Community Liaison Trent Sizemore said Fermi’s goal is to “improve efficiency over time by using new technology and closed-loop systems that recycle water throughout the process.” He added that the company intends to use treated wastewater, saltwater, or effluent water where possible, rather than relying solely on fresh groundwater.
Sizemore also emphasized that Fermi is subject to the same regulations as agricultural producers under local groundwater district rules, which limit pumping to one acre-foot per acre annually. He said the company is exploring hybrid and air-cooling systems designed to reduce groundwater reliance and recycle water multiple times.
Despite these assurances, local advocates remain unconvinced. They argue that even efficient systems still require significant amounts of water, and that the cumulative impact of such a massive facility could affect not just the aquifer but also utility rates and infrastructure in the long term.
Economic and Strategic Significance
City leaders have consistently framed the Fermi America project as a cornerstone of Amarillo’s economic future. With the company’s plans for a vast AI data center and advanced energy campus, Amarillo could become a hub for technology and energy innovation across the Southwest.
The 5,800-acre site east of Pantex would combine data processing, research, and renewable power generation. Fermi has said it expects to generate and utilize up to 11 gigawatts of energy once the project is fully operational—a capacity rivaling some of the largest utility providers in the country.
The company is also pursuing a tax abatement agreement with Carson County, where much of the project’s infrastructure will be located. Those discussions remain ongoing.
Mayor Stanley said during the previous council session that the city’s role is primarily to determine whether its water system can safely and sustainably support the project’s early phases. “We looked at what’s feasible,” he said earlier this month, “and we arrived at a range that allows us to support initial development while maintaining Amarillo’s own needs.”
Calls for Transparency and Accountability
Simpson’s dissent centered on transparency and the city’s responsibility to ensure that Fermi follows through on its promises. Earlier this month, he proposed that Fermi submit a formal “Commitment to Amarillo and the Panhandle Plan,” which would be incorporated into the agreement.
He said such a plan should clearly outline Fermi’s environmental, economic, and community commitments—backed by measurable standards. “Fermi’s top leadership acknowledged that mistakes have been made,” Simpson said, “but also expressed a clear commitment to transparency, stewardship, and a genuine partnership with the City moving forward.”
While his amendment did not gain traction before the vote, Simpson’s proposal underscored a broader tension between the city’s enthusiasm for new development and residents’ demands for accountability.
Looking Ahead
With the agreement now approved, Fermi America can move forward with its first phase of construction. The company has indicated it will begin with the initial 2.5 million-gallon-per-day allocation as it builds out infrastructure and prepares for early operations.
City officials emphasized that any future increases in water supply would require further review and approval by the council. They also said the city will monitor the project’s impact on local resources and utilities.
For now, Amarillo stands at a crossroads—balancing the promise of cutting-edge industry with the realities of life in a semi-arid region where water is as vital as it is finite.
After the vote, the divide within the community remained clear. Supporters left hopeful that Amarillo could become a leader in energy and technology. Opponents left determined to hold both Fermi and the city accountable for the promises made.
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