Texas Officials Target Data Centers Over Water Reporting Failures

Governor Greg Abbott and Attorney General Ken Paxton are cracking down on hundreds of data centers that failed to disclose water usage over the last five years. Abbott directed the Texas Water Development Board to notify local prosecutors of noncompliant facilities and halted approvals for new data center projects in August pending a statewide audit of the industry's impact on the power grid and natural resources.

As part of this enforcement, Ken Paxton issued formal letters to 156 data center developments across 32 counties, including Harris, Dallas, and Tom Green, demanding accurate water usage information. The investigation targets facilities that ignored the Texas Water Development Board's annual surveys. Only about 30% of the 329 data centers surveyed last year responded, a gap that officials say hindered projections for the 2027 state water plan.

Data center operators, represented by the Texas for the Data Center Coalition, claim some low response rates resulted from contact information discrepancies. While the state has threatened fines and the withholding of permits, legal experts note that current law limits penalties to a Class C misdemeanor with a maximum fine of $500 per violation, which may be negligible for large corporations. Most facilities are also ineligible for the state funding that Abbott has threatened to withhold.