Austin leaders are seeking to mandate long-range water use and conservation plans from facilities that use large amounts of water. They're also considering limits or a ban on large data centers, and where those projects might fit into the city's pursuit of new economic development prospects.
“The overall message is that Austin is looking very carefully at water usage, and if you want to use a lot of water you’ll not only have to pay your fair share for water and infrastructure, but you also have to conserve as much as possible," said council member Mike Siegel, the measure's sponsor.
The overview
Siegel's resolution approved July 23 would impose new water planning processes for local projects. As proposed, large-volume water customers in Austin would be required to:
- Provide detailed water use projections and utility line extension information to Austin Water
- Follow water conservation strategies like connecting to the city's reclaimed water, or Purple Pipe, system
- Reduce overall potable water use through recycling, conservation or other plumbing and treatment options
- Submit water conservation outlines to Austin Water during development review, including specific plans to cut water needs
- Account for water discharges from their facilities
New project applications or conservation plans that don't meet the outlined standards would require City Council approval to move forward. And existing facilities that increase their water use to higher levels could also become subject to the new conservation rules.
Final policies based on Siegel's resolution and "responsive to community concerns" will be presented to council members before the end of the year, he said. Those recommendations will come with possible updates to Austin's drought contingency plan related to high volume customers. The city will also begin detailed annual reporting on those users.
The context
Siegel said he drafted the resolution as Austin's largest water customers are now using tens or hundreds of millions of gallons annually. He also noted concerns about other potential resource-intensive projects like an Amazon robotics project coming to the Dog's Head area in East Austin; council members advanced a financing plan for that district hours after passing the water use measure.
Austin Water's largest 10 customers alone are now using billions of gallons of water annually. Samsung Austin Semiconductor's 2.23 billion gallons used at its Northeast Austin facility was the most among top customers as of 2025, according to recent reporting from the utility, followed by a Travis County water district, The University of Texas at Austin, NXP USA and Tesla.
Large volume customers represented 6% of all water used across the utility service area last year. Residential customers make up the majority at about 52%.
What they're saying
The new water use framework represents the first piece of a larger effort by City Hall to restrict hyperscale data centers in Austin. More policies are expected to be considered this summer related to land use, noise regulations and Austin Energy. The city-owned utility previously reported on data centers' rapid expansion and potential to put "tremendous strain" on the power grid.
"We know Austinites are concerned about the negative impact of data centers on our natural resources and quality of life, and this policy gives the City an opportunity to deny service to 'large volume water users,'" Siegel said in a statement. "[I]f the heaviest water users do not implement conservation plans, utilize 'purple pipe' reclaimed water, or pay the full cost of service, including water and infrastructure, they will not be provided service."
Council member Ryan Alter also called the proposal the first phase of an ongoing approach to preserve on of the city's most critical resources.
"Really at the end of the day, we want to make sure that if you are a large water user and you’re coming to Austin, that you recognize that you’re going to have to use reclaimed water. You’re not going to be able to just suck this most precious resource away from the rest of us who need it," he said. "The lakes may be full today, but anyone who’s been here a minute knows they can dry up just as fast."
Zooming out
Austin's action comes as state leaders are also weighing the prospects of new data center additions, and their water usage.
Data centers across Texas used an estimated 25 billion gallons last year, demand that could rise to anywhere from 29-161 billion gallons by 2030, according to recent analysis by the Houston Advanced Research Center. Austin is already home to more than 90 of Texas' hundreds of data center facilities, according to reporting by industry research and advisory firm Baxtel.
State officials previously told lawmakers that Texas has limited insight into data centers' water use. The latest version of a statewide water plan has minimal references to data center development, and long-range water projections don't account for data centers' water use or impacts on water availability. The Texas Water Development Board has cited a lack of currently available information, resulting in difficulty with forecasting, and said more data will be reported in the future.
“When you’re talking about massive water usage, especially groundwater, and the state can’t calculate how much water is being [used], I think we can all understand why Texans are rightfully concerned about making sure that we have enough water ... to meet our future demand,” state Rep. Trent Ashby, R-Lufkin, said at a June hearing.
Texas legislators are also considering data centers' effects on electricity costs and use of state tax incentives this summer.
Hannah Norton contributed to this report.
