Abbott orders penalties for Texas data centers failing to report water use

Gov. Greg Abbott on Monday directed the Texas Water Development Board to penalize data centers that fail to enforce state water-use reporting requirements. Abbott said some major water users, including data centers, appear to have violated state law by not providing required information about their water use, and he ordered the agency to impose legal consequences for past and future reporting failures.

“Data centers must share the duty to protect Texas water,” Abbott said in a statement. “The Texas Water Code requires a complete and accurate water use survey. I direct the Texas Water Development Board to use its enforcement authority to penalize past failures and to impose legal consequences for any future failure to comply.”

Under the Texas Water Code, recipients of a TWDB water-use survey must complete and return it. According to Abbott’s office, a data center that fails to do so could face criminal consequences and become ineligible for certain Texas Commission on Environmental Quality permits, amendments or renewals. TWDB can also refer noncompliance to the appropriate county or district attorney.

The TWDB said it will comply with the directive. “The TWDB recognizes the need for complete water-use reporting from major water users, including data centers,” the agency said in a statement. “Those reports are critical to the agency’s long-term water planning.”

Democratic gubernatorial nominee Gina Hinojosa criticized the move. “Looks like Greg Abbott saw another bad poll today,” Hinojosa said in a statement. “A strongly worded letter every day from now until the election won’t change Texans’ minds about how Abbott has made Texas the Wild West of data centers.”

She called on Abbott to call a special session. “Texans deserve real regulations on data centers right now,” she said.

Claudia Hollern, a volunteer with the Caldwell Data Center Action Team, said she believes the state should consider broader action. “At this point, it seems like, kind of a distraction instead of an actual directive to make these data centers slow down,” Hollern said. “I don’t understand why Greg Abbott doesn’t just call a special session and have a moratorium to pause this.”

The directive builds on an August order in which Abbott directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas to conduct a comprehensive audit of data centers advancing through ERCOT’s interconnection process. That audit covers water consumption, water sources and the use of water-efficient technologies, and data center projects that fail to complete the audit are required to be denied interconnection.

TWDB will work with ERCOT to gather additional information about data center water use. The agency is required to provide Abbott with an update on its enforcement progress by Oct. 14.

Tom Seng, an assistant professor of energy finance at Texas Christian University, said he was surprised the state had not already taken stronger action. “I think water is rising to the top in terms of critical issues,” Seng said. “Going forward, we need to have a set of rules and standards. I’m a little surprised that this hasn’t already been going on.”