As more data centers are being built in Texas, the state’s water planning agency is warning that limited information is available about the booming industry and its impact on water supplies.
The big picture
The Texas Water Development Board adopted its initial 2027 State Water Plan on July 23, with a “more robust” version of the plan expected later this year. The 97-page plan includes the phrase “data centers” twice and mentions “AI facilities” once.
The plan consists of 3,000 proposed water management projects and 6,700 recommended strategies, which experts say are needed to prepare for a future “drought of record,” when water demands are highest and supplies are lowest.
It will cost about $174 billion to complete the projects, according to the TWDB. However, if they are not implemented, a severe drought could cost the state $91 billion in economic damages as soon as 2030 and lead to $177 billion in annual losses by 2080.
The water plan estimates that over 52 million people will live in Texas by 2080, up from about 31.7 million today. From 2030-2080, demand for water is expected to increase by 6%, and existing water supplies are projected to decline by 10%. This anticipated decline is “primarily due to depletion of aquifers,” the plan reads.
These projections do not account for the amount of water that data centers—which largely purchase their water from public systems—may use or how the large facilities could contribute to overall water availability. Right now, the board said it did not have enough information to do so.
The plan comes as water restrictions and shortages are becoming more common in areas throughout the state, according to previous Community Impact reporting. The 50-year plan is updated every five years based on the work of 16 regional planning groups.
Zooming in
The water development board said it received over 1,000 public comments, the most in the plan’s history, on the new water plan. Approximately 268 comments spoke to how much water data centers and cryptocurrency mining facilities use, with commenters expressing concerns that the document “does not plan for data center water use and future demand” and asking that the board include projections of how data centers will impact water availability.
Some Texans also asked that the TWDB regulate or restrict data center development, although officials said they do not have the authority to do so. Regulations for data centers and other water-related industries are determined by the state legislature, board members said at the July 23 meeting.
Data centers—like all industries in Texas—are required to complete annual water use surveys and submit them to the TWDB, but few data center companies are doing so, TWDB water planning director Temple McKinnon told state lawmakers one month earlier.
The agency has been following the data center expansion for years, McKinnon said during a June 23 legislative hearing, noting that precise details about water impacts remain limited. Of the 341 data centers that were sent surveys last year, 83% failed to respond, she said.
Based on completed surveys, the TWDB found that surface water makes up nearly 90% of the water Texas data centers use, while groundwater makes up 8% and 2% came from an unknown source, McKinnon said. Lawmakers said the low response rate undermines both long-term water planning and residents’ trust in data centers.
“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,” Rep. Trent Ashby, R-Lufkin, said June 23.
The TWDB also pointed to “limited data” about data centers’ water use as the reason for a lack of focus on the industry in the 2027 state water plan. Looking ahead, the board is expanding its data collection and analysis efforts of “high-load digital infrastructure water demands” as it prepares for the 2032 state water plan, according to agency documents.
“As our understanding of this sector grows, this water use category will report and fall more comprehensively within our manufacturing water use projections largely because of direct-use reporting,” a response to public comments reads. “Long-term forecasting for these types of facilities remains difficult due to rapidly evolving technologies, diverse energy sources, increasing onsite generation, and the proprietary nature of facility siting.”
More details
During the July 23 TWDB meeting, the three-member board also denied a petition by Wimberley resident Margaret Elizabeth Hill, who asked the state water plan be amended to include “mandatory standalone water demand projections” for data centers and crypto-mining operations. Hill cited a May report from UT-Austin’s COMPASS research consortium, which predicts that data centers will account for 3-9% of Texas’ water use by 2040, up from 1% today.
“By failing to account for this sector, the plan is factually insufficient and fails to utilize the ‘best available data’ required by law,” Hill wrote in her petition.
While Hill’s petition was denied, board members noted that regional water plans—which are combined to make the state plan—can be amended “at any time” as more information becomes available about local data centers or other issues. The TWDB noted that none of the 16 regional planning groups requested any data-center related adjustments to their water demand projections while working on the 2027 state water plan.
“I don’t want folks to think that if it's not in the water plan, someone's not thinking about it or someone's not considering it,” board member Brady Franks said July 23. “Folks can come back to us at any point to add more projects to it. We take our planning process really, really seriously and want to ensure that we have the best product available.”
Board members said they also cannot make, change or remove the recommendations in the plan, as those come from the regional planning groups. The only changes made between an April 16 release of a draft of the plan and its July 23 approval were to add additional context about water management strategies, better describe certain legislative recommendations and explain the board’s authority as it relates to data centers, McKinnon said.
“To those that commented publicly, I'm so encouraged by that,” board member Ashley Morgan said. “Water is so important, and I feel like more and more people are becoming aware of that, and so we need them involved.”
One more thing
The current version of the state water plan was “developed on an accelerated schedule” to meet certain deadlines for the State Water Implementation Fund for Texas program, which provides financial assistance for projects in the water plan. Later this year, the TWDB plans to create and publish a “more robust and informative” version of the plan with additional analysis, per agency documents.
The final version of the plan, which must be completed by Jan. 5, is also slated to break down the $174 billion price tag by decade, which Morgan said will give Texans “an idea of exactly how much money we should be spending and how much supply we should be focused on, and [the] water management strategies we should be seeing come online.”
