Gov. Greg Abbott and Attorney General Ken Paxton are demanding greater transparency about data center water use, but limited penalties and years of poor reporting raise questions about whether Texas law has enough teeth.
Texas leaders are talking tough about data centers and their growing demands on the state's water supply. Whether that tough talk will translate into meaningful enforcement is another question.
Gov. Greg Abbott and Attorney General Ken Paxton have recently stepped up pressure on data center operators that have failed to report their water usage, promising greater accountability for an industry expanding rapidly across Texas.
There is just one problem: Under existing state law, a facility that ignores a required water-use survey can face a maximum criminal fine of $500.
For companies investing millions or even billions of dollars in massive computing facilities, that penalty may not provide much incentive to comply.
The situation highlights a growing challenge for Texas policymakers. State officials want the economic development, technology investment and jobs associated with data centers, but they also need to understand how much water those facilities consume, particularly in communities already facing long-term water supply concerns.
And right now, the state doesn't have a complete picture.
Hundreds of Data Centers Have Failed to Report Water Use
Texas law requires certain large water users, including data centers, to complete annual surveys administered by the Texas Water Development Board.
The information helps state planners understand current water demands and prepare for future needs, including projections extending 50 years into the future.
But compliance among data centers has been consistently poor.
In 2023, the board surveyed 22 data centers, with roughly one-third responding. The following year, 67 facilities received surveys, but only 28% submitted responses.
The numbers became more concerning in 2025, when the agency surveyed 329 data centers and received responses from only about 30%.
Records covering 2020 through 2025 identified 334 unique facilities. Of those, 233 never submitted a requested survey, while 101 responded at least once.
That means approximately seven out of every ten facilities identified in those records had never submitted the requested information.
Those figures raise legitimate concerns about the effectiveness of a reporting system that depends heavily on cooperation from the companies being monitored.
However, industry representatives say the problem isn't entirely the result of companies refusing to cooperate.
Cameron Poursoltan, director of energy policy at Texas for the Data Center Coalition, said the organization supports annual water reporting and has worked with the state to address problems involving contact information and data discrepancies.
“Data centers take water stewardship extremely seriously,” Poursoltan said.
The distinction matters. A company deliberately ignoring a legal requirement is different from one that never received the appropriate paperwork.
Still, whatever the explanation, the end result is the same: Texas lacks reliable information about the industry's total water consumption.
Abbott and Paxton Want Enforcement, but What Can the State Actually Do?
Abbott has directed the Texas Water Development Board to identify noncompliant facilities and notify local prosecutors about potential violations.
Paxton has also launched an investigation into hundreds of data center developments across several Texas counties, seeking to determine whether operators are complying with state reporting requirements.
The enforcement effort sounds significant, but the available penalties are limited.
Failure to complete a required water-use survey can result in a Class C misdemeanor carrying a maximum $500 fine. State law also allows certain funding and permitting restrictions.
Yet those additional consequences may have less impact than they initially suggest.
Data centers generally are not eligible for the state water infrastructure funding that officials could withhold. The funding programs primarily serve cities, counties, water districts and other public water providers.
Environmental permitting restrictions also have limitations.
The Texas Commission on Environmental Quality can withhold certain permits or renewals, but the law does not authorize the agency to revoke or suspend existing permits simply because an operator failed to complete the survey.
That means a facility already operating with the necessary permits might face few immediate consequences.
Kathryn Guerra, who leads a watchdog campaign at Public Citizen, questioned whether enforcing existing requirements would be enough.
“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,” Guerra said. “If those are the laws that we already have and nobody's enforcing them, the data centers know.”
Abbott's office argues that the effort involves more than the Water Development Board alone.
Andrew Mahaleris, the governor's press secretary, said multiple state agencies, including the Public Utility Commission of Texas, ERCOT and the Texas Commission on Environmental Quality, will coordinate their oversight.
“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,” Mahaleris said.
The governor has also recommended that data centers pay for their own electrical infrastructure, adopt less water-intensive cooling systems and contribute power generation to the Texas grid.
Those proposals address broader concerns about the industry's impact, although recommendations and existing enforcement authority are not necessarily the same thing.
The Water Numbers Are Already Significant
Even with incomplete reporting, the water consumption figures collected by the state show why the issue is receiving increased attention.
In 2023, seven facilities reported using more than 144 million gallons of water combined.
In 2024, 19 facilities reported more than 660 million gallons.
By 2025, 97 facilities reported a combined 1.4 billion gallons.
Those numbers should not be interpreted as a precise measure of how quickly individual data centers are increasing their water consumption. Much of the increase reflects the growing number of facilities included in the reporting data.
They do, however, demonstrate the scale of water demand that state planners must consider.
And because most surveyed facilities did not respond, actual industry-wide consumption remains unknown.
For a state that regularly confronts drought conditions, population growth and competing agricultural, municipal and industrial water needs, that information gap is significant.
It also has consequences for long-term planning. The Water Development Board has acknowledged that insufficient data prevented it from incorporating data center water use into projections for the 2027 state water plan.
Data Centers Bring Economic Benefits, but Communities Want Answers
The debate isn't simply about whether Texas should welcome data centers.
These facilities support cloud computing, artificial intelligence and the digital services used by businesses and consumers every day. Their development can attract major private investment, create construction work and generate local tax revenue.
At the same time, the industry's electricity and water demands can place additional pressure on infrastructure that communities depend on.
The balance becomes especially important in areas where water supplies are already stretched.
Data center operators also don't all use water in the same way. Cooling technologies, facility design and local climate can produce substantial differences in consumption.
Some operators are investing in water-efficient cooling systems and conservation projects.
Meta, for example, has reported water use at its Fort Worth facility for the past two years. The company says the facility consumes an average of 72 million gallons annually and uses water-efficient cooling technology.
A Meta spokesperson said the company supports responsible development and is investing in water restoration projects as part of its goal to restore more water than it consumes by 2030.
Such efforts deserve consideration, but voluntary conservation commitments are not a substitute for consistent, verifiable reporting across the industry.
The public appears increasingly concerned about where new facilities are built.
An August University of Texas/Texas Politics Project poll found that 57% of Texas voters opposed construction of a data center in their community.
Republicans were nearly evenly divided, with 45% supporting local construction and 43% opposing it. Among registered Democrats, opposition reached 75%.
Those numbers suggest that concerns about data center development extend beyond one political party.
They also help explain why Abbott and Paxton have made the issue a higher priority.
Texas May Need More Than a $500 Fine
There is a reasonable argument that existing laws should be enforced before lawmakers create new ones.
Businesses should be expected to comply with reporting requirements already on the books, and state agencies should have procedures to identify violations and pursue appropriate consequences.
But enforcement is only effective when the consequences are meaningful and the process works.
Under the current system, the Water Development Board cannot prosecute violations itself. Instead, local county and district attorneys must decide whether to pursue cases after receiving information about noncompliant facilities.
The attorney general also faces limits on independently prosecuting local criminal matters.
Meanwhile, the maximum misdemeanor penalty remains $500.
For a smaller business, that amount might be noticeable. For a large technology company, it may be little more than an administrative expense.
That doesn't automatically mean every company would disregard the law. Reputational concerns, future permitting needs and relationships with state regulators can also encourage compliance.
Nevertheless, the gap between the scale of these facilities and the available financial penalties is difficult to overlook.
Lawmakers could consider increasing fines, creating stronger reporting procedures or giving regulators additional tools to address repeated violations.
They could also examine whether the current survey process is sufficiently accurate, particularly given industry complaints about incorrect contact information.
Any changes should distinguish between deliberate noncompliance and legitimate administrative errors while establishing clear, consistent expectations for operators.
The next regular legislative session begins in January 2027, giving lawmakers an opportunity to revisit the law.
The Bigger Question Is Whether Texas Can Plan for What It Cannot Measure
Texas has good reasons to welcome investment in advanced technology. Data centers are an important part of the modern economy, and their continued growth appears likely as demand for artificial intelligence and digital infrastructure expands.
But economic development and responsible water management should not be treated as competing goals.
Both require reliable information.
The state cannot accurately plan future water supplies if hundreds of major industrial facilities fail to report how much water they consume.
Likewise, communities cannot fully evaluate proposed developments without understanding their potential impact on local resources.
Abbott and Paxton have brought greater attention to the issue, and their enforcement efforts could improve compliance. Whether those efforts produce meaningful results remains to be seen.
The Water Development Board is required to provide Abbott's office with an enforcement progress update by October 14, an important checkpoint for determining whether the state's approach is working.
Ultimately, Texas policymakers face a straightforward question: If the state considers water-use reporting important enough to require by law, shouldn't the consequences for ignoring that requirement be substantial enough to encourage compliance?
A $500 fine alone may not answer that question.
