Texas is starting to treat data center water use as more than a sustainability issue.
In September 2026, Governor Greg Abbott directed the Texas Water Development Board to increase enforcement of existing water-use reporting requirements for major users, including data centers. A week later, he directed the Texas Commission on Environmental Quality to halt permits sought by data center projects while the state completes a broader review of their electricity and water impacts.
Those actions do not create an entirely new statewide water code for data centers, but they make the direction clear: Texas wants better information about how much water these facilities use, where that water comes from, and whether future demand can be supported.
For developers, contractors, utilities, and communities, that moves water much closer to the center of the planning process.
Texas already requires certain major water users to complete an annual Water Use Survey through the Texas Water Development Board.
The survey is used to help the state understand current water demand and plan for future needs. It includes industrial users such as manufacturing facilities, mines, power plants, and data centers.
In September, the governor directed TWDB to more aggressively enforce those existing reporting requirements and penalize major users that fail to provide required information.
TWDB has also begun tracking data center water use more specifically. Beginning with the 2025 Water Use Survey, the agency started reclassifying identifiable data center water use into the manufacturing sector rather than allowing it to remain buried within broader municipal or commercial totals.
That matters because Texas is trying to answer a basic question that has become increasingly important as data center development accelerates:
How much water will this industry actually need?
The state then took another step by directing TCEQ to pause data center permitting while agencies complete a broader review of data center electricity and water impacts.
The message is straightforward. Water demand is becoming something developers may need to explain earlier and in more detail before projects move forward.
The most immediate change is not that every data center suddenly faces a new water-use limit.
It is that water use is becoming harder to treat as a secondary issue.
Developers increasingly need to understand how much water a facility will use, what source will supply it, how cooling design affects demand, and whether local infrastructure can support that demand over the long term.
That can become complicated quickly because there is no single number for “data center water use.”
A facility using evaporative cooling can have a very different water profile from one using a closed-loop or primarily air-cooled system. Climate, server load, water chemistry, operating conditions, and reuse systems can all change the numbers.
There is also a major difference between water used during construction and water used during normal operations.
Construction and commissioning can generate water from hydrotesting, mechanical flushing, equipment cleaning, cooling-loop preparation, and other temporary activities. Once the facility is operational, the larger questions may involve cooling demand, blowdown, maintenance water, fire protection, and other ongoing uses.
For contractors and developers, those are separate planning problems, and both need outlets.
The reason Texas is asking for better information is not difficult to understand.
A large data center can introduce significant new water demand into a community, sometimes very quickly. Residents and local officials increasingly want to know whether a project will compete with homes, agriculture, existing industries, or future development for limited water supplies.
That means water is becoming part of the community-acceptance conversation as well as the permitting conversation.
A project that can clearly explain its water source, expected demand, cooling technology, reuse strategy, and wastewater plan is in a much stronger position than one that can only say it expects the local utility to handle the need.
This is where reclaimed water and other non-potable sources may become more valuable.
A data center that can use treated municipal wastewater or another alternative source for cooling may reduce pressure on drinking-water supplies. EPA's Water Reuse Action Plan 2.0 is encouraging exactly this type of planning for data centers and other large industrial users.
Texas has also signaled interest in requiring water-efficient technologies such as closed-loop cooling for future data center projects. That is not yet a statewide requirement, but it shows where the policy conversation may be heading.
Most public discussion focuses on how much water a data center consumes.
Facilities also need to understand what happens after that water is used.
Evaporative cooling systems concentrate minerals and dissolved solids in the water that remains, eventually creating cooling-tower blowdown that needs to be discharged or treated.
Closed-loop systems can reduce ongoing water consumption but still generate wastewater during initial flushing, maintenance, chemical changes, or system drain-downs.
Commissioning water may contain suspended solids, corrosion inhibitors, glycol, dissolved metals, oils, or construction debris.
That means a complete water plan should answer two questions:
Where will the water come from?
Where will it go when the facility is finished with it?
A site may have enough water available but lack sewer capacity or an appropriate wastewater outlet. In other cases, the chemistry may not meet the receiving utility's acceptance requirements.
Finding that out late can create delays.
The biggest takeaway from Texas' recent actions is probably timing.
Water planning is moving earlier in the development process.
Power, fiber, land, and tax incentives have traditionally dominated data center site selection. Water availability, wastewater capacity, and alternative water sources are becoming increasingly important parts of that same decision.
Developers may need to know not only whether enough water is available today, but whether that supply remains dependable during drought, whether the local utility has room for additional demand, and whether future campus expansions can still be supported.
Communities may also begin viewing reclaimed-water infrastructure as an economic-development advantage. A location that can support large industrial projects without relying entirely on potable water may become more attractive as scrutiny increases.
The same is true for wastewater infrastructure.
A strong water plan needs to account for both sides of the system.
Texas has not suddenly created an entirely new regulatory system for data center water use.
What has changed is the level of attention.
The state is trying to identify data center demand more clearly, enforce existing reporting requirements more aggressively, and understand the combined water and electricity impacts of future growth.
That means water is moving from a sustainability metric discussed after a facility opens to a project requirement that may influence planning, permitting, design, and community support before construction begins.
For developers and contractors, the practical lesson is simple: understand the water plan early.
Know where the water will come from, how cooling choices affect demand, what wastewater will be generated during construction and operation, and what alternatives exist if municipal infrastructure cannot handle it.
At Valicor, we work with data center contractors and operators on wastewater generated during construction, commissioning, mechanical system flushing, cooling-system maintenance, and ongoing operations. Planning those outlets early can help keep water and wastewater from becoming another constraint on an already complex project.
Texas Governor's September 14 directive on water-use reporting:
https://gov.texas.gov/news/post/governor-abbott-directs-twdb-to-penalize-data-center-reporting-failures
Texas Water Development Board Water Use Survey:
https://www.twdb.texas.gov/waterplanning/waterusesurvey/index.asp
TWDB Water Use Survey FAQ:
https://www.twdb.texas.gov/waterplanning/waterusesurvey/faq.asp
Governor Abbott's September 21 directive on data center permits:
https://gov.texas.gov/news/post/governor-abbott-directs-tceq-to-halt-data-center-permits
EPA Water Reuse Action Plan 2.0:
https://www.epa.gov/waterreuse/water-reuse-action-plan-20