Texas officials are making a renewed push to understand how much water and electricity the state's rapidly expanding data center industry consumes, warning that a lack of reliable information could complicate long-term planning for both the electric grid and the state's increasingly strained water supply.
The Public Utilities Commission of Texas (PUCT) has reopened a voluntary survey of data centers and cryptocurrency mining facilities after receiving a far lower response than lawmakers had hoped during its initial rollout this spring. State leaders say the effort is essential as Texas experiences explosive growth in artificial intelligence infrastructure while simultaneously grappling with persistent drought conditions, growing populations, and mounting concerns over grid reliability.
Texas is home to the nation's second-largest concentration of data centers, making it one of the country's fastest-growing hubs for cloud computing and AI development. While these facilities have brought billions of dollars in investment, they have also drawn increasing scrutiny from policymakers and local communities concerned about the enormous amounts of electricity and water required to operate them.
Those concerns have become especially significant in Texas. Since the devastating statewide power failures during the 2021 winter storm, state officials have focused heavily on strengthening the electric grid as electricity demand continues to climb. At the same time, several regions—including Corpus Christi and other rapidly growing communities—face mounting pressure on limited water supplies due to prolonged drought and population growth.
The challenge for lawmakers is that they still lack a clear picture of how much of these critical resources the expanding data center industry actually consumes.
As part of the 2025 legislative budget, the Texas Legislature directed the PUCT and the Texas Water Development Board to collect information from data centers and cryptocurrency mining operations regarding their electricity and water use. The survey also asks facilities to identify where their water and power come from and what type of cooling systems they employ.
The information is intended to help state agencies better understand how emerging technologies will affect future infrastructure needs and guide both water and energy planning.
Modern data centers house thousands of powerful computer servers that generate significant heat around the clock. Preventing that equipment from overheating requires sophisticated cooling systems, but those systems vary widely in how they operate.
Some facilities rely primarily on large air-cooling systems powered by electricity. Others use water-based cooling technologies that can substantially reduce electricity needs but may consume large volumes of water depending on their design.
Not all water-cooled systems have the same environmental impact. Facilities using closed-loop cooling systems recycle much of their water internally, dramatically reducing the need for continuous withdrawals from municipal supplies or groundwater sources. Other cooling methods require a steady supply of fresh water, increasing demand on already stressed local water systems.
Because so little information has been collected statewide, planners currently cannot determine how common each cooling technology is across Texas.
The lack of participation in the initial survey has become one of the biggest obstacles to answering those questions.
The first survey was conducted during April and May, but only 92 facilities responded. That represents fewer than 16 percent of the state's 582 operational or planned data centers, leaving regulators with significant gaps in the information needed to assess future resource demands.
During a recent hearing before the Texas House Natural Resources Committee, PUCT officials acknowledged the disappointing participation rate while explaining that the agency had mailed notices directly to facilities and worked with industry organizations and utility companies to encourage responses.
Following concerns raised by lawmakers that additional outreach was needed, the commission reopened the survey from July 1 through July 10 in hopes of improving participation before compiling statewide findings.
Because the survey is voluntary rather than mandatory, regulators have limited authority to require companies to participate. That reality has frustrated lawmakers who argue that better information is necessary before Texas can responsibly plan for continued growth in artificial intelligence infrastructure.
The timing of the survey has taken on greater urgency following new research examining how rapidly data center water demand could grow.
A recent study from researchers at the University of Texas at Austin estimates that data centers could account for as much as 9 percent of Texas' total water consumption by 2040. That would represent a dramatic increase from approximately 0.4 percent of statewide water use in 2025, reflecting the expected expansion of AI computing facilities over the next decade and a half.
Although those projections depend on future technology choices and cooling methods, they underscore why state planners believe more accurate information is needed now rather than years from now.
The Texas Water Development Board updates the state's comprehensive water plan every five years, with the next version scheduled for release in 2027. Much of the planning process currently underway began before the recent explosion in artificial intelligence investment and before many of today's largest data center projects were announced.
Without reliable information on actual water consumption and projected growth, planners risk either underestimating future demand or making overly cautious assumptions that could distort long-term infrastructure planning.
Energy planners face a similar challenge. The Electric Reliability Council of Texas has already projected significant increases in electricity demand over the coming years, with data centers expected to become one of the fastest-growing sources of new consumption. Understanding how facilities balance electricity use with different cooling technologies could help officials better anticipate future resource needs across both systems.
As Texas continues attracting technology investment at a record pace, policymakers increasingly find themselves balancing economic development with responsible management of finite natural resources.
The renewed survey represents an effort to close one of the state's most significant information gaps. Whether enough companies participate this time remains uncertain, but lawmakers argue that comprehensive data will be essential to crafting policies that support continued technological growth while protecting the state's long-term water and energy security.
