Gov. Greg Abbott is escalating Texas’ scrutiny of data centers, directing state water officials to pursue legal consequences against facilities that fail to comply with water-use reporting requirements.
Abbott issued the directive Monday, September 14, instructing the Texas Water Development Board to take action on past and future reporting violations by major water users, including data centers.
“Data centers must share the duty to protect Texas water,” Abbott said.
The announcement does not identify any companies currently facing enforcement action, nor does it say criminal charges have been filed. Instead, the directive lays out how the state should handle data centers and other major water users that fail to comply with reporting requirements.
Reporting Failures Could Affect Water Permits
Recipients of the Texas Water Development Board’s water-use survey are required to complete and return it. According to Abbott’s office, failure to comply can carry criminal consequences and could make a data center ineligible for certain water permits, amendments or renewals under Chapter 11 of the Texas Water Code.
Abbott directed the board to refer violations to the appropriate county or district attorney. The Texas Commission on Environmental Quality is also to be notified when a violation could affect a facility’s eligibility for a water permit.
The water board has until October 14 to report on its enforcement progress.
Abbott also wants the agency to coordinate with electricity regulators to obtain additional information about data centers, including how much water they consume, where that water comes from and what technologies they use to reduce consumption.
The order adds another layer to a rapidly expanding state examination of an industry that has become increasingly important to Texas’ economy and increasingly controversial in communities where massive facilities are proposed.
Water, Secrecy and Local Control
The debate extends well beyond whether companies file required paperwork.
Residents and elected officials have raised questions about the amount of water and electricity large data centers could require, along with how much information communities receive before major projects move forward.
State Rep. Helen Kerwin raised those concerns directly with Abbott earlier this year, asking the governor in March to consider pausing large-scale data center development in rural communities while state and local officials evaluated the potential long-term effects on infrastructure and natural resources.
Kerwin specifically pointed to development interest near the Comanche Peak Nuclear Power Plant and called for clearer opportunities for public notice and citizen participation when projects seek substantial water supplies or connections to the electrical grid.
Similar concerns have surfaced nationally.
Environmental advocate Erin Brockovich has highlighted complaints from residents who say they have been left out of decisions involving data center projects near their communities. Her concerns have included nondisclosure agreements and limited communication during the development process, as well as questions about water consumption, noise and utility costs.
At the same time, Brockovich has acknowledged that data center development can bring benefits to communities when companies disclose potential impacts and negotiate agreements that provide tangible local benefits.
Electricity Demand Adds Another Concern
Abbott’s water directive comes about six weeks after he ordered a comprehensive review of data center projects seeking access to the Texas electrical grid.
On August 3, Abbott directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas to audit projects moving through ERCOT’s interconnection process. Projects that fail to provide required information could be denied a grid connection.
That review seeks information about projected electricity and water consumption, project ownership, public financial assistance and steps developers plan to take to reduce effects on surrounding neighborhoods. State officials also want to know whether individual projects intend to generate their own electricity or depend on ERCOT’s grid.
The numbers involved are significant.
At the time Abbott announced the audit, his office said ERCOT was considering more than 474 gigawatts of connection requests, with approximately 90% associated with data centers.
Those figures represent proposed electricity demand rather than power currently being consumed, an important distinction as Texas officials attempt to determine how much of the projected demand will actually materialize.
A September 1 Reuters review raised additional questions about those projections. The news organization found that some large electricity requests could be duplicative or tied to developers that may lack the financing or expertise necessary to complete their projects.
Regulators and consumer advocates have warned that speculative requests could complicate infrastructure planning. If utilities build around demand that ultimately does not materialize, the concern is that some of those costs could eventually fall on other customers.
Developers Point to Economic Benefits and New Technology
The growing scrutiny comes as data center developers and supporters emphasize the industry's potential economic benefits.
Large projects can generate construction activity, property tax revenue and investment while providing the computing infrastructure needed to support artificial intelligence and other digital services.
Developers have also begun highlighting technology intended to limit their effect on local resources.
In announcing an expansion of its Abilene campus, Crusoe said its cooling system is designed to continuously recirculate water through a closed loop without evaporative water loss. The company also outlined plans involving battery storage and solar resources.
Local officials involved with the Abilene announcement pointed to expected economic activity and additional tax revenue that could support public services.
Those commitments, however, apply specifically to the Abilene development and should not necessarily be viewed as representative of every proposed data center in Texas.
That distinction is part of what Abbott’s broader reviews appear designed to address.
State officials are seeking project-specific information about water supplies, cooling technology and projected consumption while also examining electricity demand and potential effects involving noise, lighting, traffic and emergency response.
Monday’s directive adds enforcement to that effort.
Texas is not moving to halt data center development statewide. Instead, the Abbott administration is signaling that companies seeking to build and operate massive facilities in the state will be expected to provide regulators with more information about the resources they intend to use — and could face consequences when legally required disclosures are not made.
