Source reporting: Texas Scorecard
Texas senators examined data centers’ water and electricity demands after state officials described gaps in information collected from the fast-growing industry. Texas Scorecard reported that the Senate Committee on Water, Agriculture, and Rural Affairs heard testimony September 1 from state agencies, university researchers, industry representatives and local officials.
A Texas Water Development Board representative said the agency sent 2,025 water-use surveys covering 341 facilities identified as data centers, with responses received from about 30 percent of the facilities by August 2026. Public Utility Commission officials also described outreach to 377 facilities. The commission had received responses from 57 companies representing 168 facilities, including 144 data centers, according to the report.
Committee members raised questions about the absence of an enforcement mechanism for unanswered surveys. Chairman Charles Perry cautioned that some facilities contacted by the state may no longer be active or relevant to the review, making the raw response rate an imperfect measure. He nevertheless emphasized that use of public water resources should be transparent.
University of Texas at Austin researchers testified about differences among cooling systems and regions. One researcher estimated that data centers account for slightly more than one-half of 1 percent of statewide water use, or about 33 billion gallons annually. The testimony indicated that evaporative cooling is more effective in dry climates, while closed-loop systems can substantially reduce water consumption.
Industry representatives described efforts to use closed-loop cooling and manage local effects involving water, power, noise and light. Local officials offered mixed views. Some said data centers brought investment and cooperation, while others questioned whether projected tax revenue adequately compensates communities for infrastructure and resource demands. An Armstrong County official described a large initial payment followed by a sharply lower annual tax amount under current law, as reported by Texas Scorecard.
The hearing has public-integrity significance because lawmakers are considering policy for an industry whose operations can affect public utilities, local tax bases and long-term water planning. Reliable facility-level reporting is necessary for the state to compare economic benefits with infrastructure costs and resource risks. Texas lawmakers are expected to consider data-center resource legislation in 2027. Any proposal will need to define reporting obligations, protect legitimately sensitive business information and give communities usable data before they approve incentives or infrastructure commitments.