Abbott orders penalties for Texas data centers that fail to report water use

AUSTIN, Texas (KXAN) — Gov. Greg Abbott (R) said this week he is directing the Texas Water Development Board to penalize data centers that fail to enforce state water-use reporting requirements.

The governor’s office said that some major water users, including data centers, appear to have violated state law by failing to provide required information about their water use. Abbott directed the Texas Water Development Board (TWDB) to impose legal consequences for past and future reporting failures.

“Data centers must share the duty to protect Texas water. 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,” Abbott said in a statement.

Under the Texas Water Code, recipients of a TWDB water-use survey are required to 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.

KXAN reached out to the Texas water Development Board for comment on the directive, in a statement they said:

“ The TWDB recognizes the need for complete water-use reporting from major water users, including data centers. Those reports are critical to the agency’s long-term water planning. At the direction of Governor Abbott, the TWDB will compel all water users to comply with Texas Water Code survey requirements so that the State has the information it needs to plan for Texas’ future water needs. “

Democratic gubernatorial nominee Gina Hinojosa also criticized Abbott’s directive.

In a statement to KXAN, Hinojosa said Texans need stronger regulations governing data centers and called on Abbott to call a special session. In a statement she said:

“Looks like Greg Abbott saw another bad poll today. 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, raked in $20 million in donations from their CEOs, and pledged to make Texas the ‘epicenter’ of AI at the expense of working people. Texans deserve real regulations on data centers right now, and unless Abbott calls a special session to pass laws that protect Texans and give them a seat at the table to decide if and how data centers come into their communities – as I called for months ago – this is all just more lip service to save his campaign.”

Some Texans who have pushed back against data center development also say the governor’s directive does not go far enough.

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. I don’t understand why Greg Abbott doesn’t just call a special session and have a moratorium to pause this,” said Claudia Hollern, a volunteer with the Caldwell Data Center Action Team.

In August, Abbott directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas to conduct a comprehensive audit of data centers that advance through ERCOT’s interconnection process.

That audit includes information about water consumption, water sources and the use of water-efficient technologies. Data center projects that fail to complete the audit process are required to be denied interconnection, according to the governor’s office.

TWDB will work with ERCOT as part of that effort to gather additional information about data center water use.

The agency is required to provide Abbott with an update on the progress of its enforcement efforts 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 enforcement action.

“I think water is rising to the top in terms of critical issues. We have ways to produce electricity, I don’t know that we have ways to produce fresh drinking water. 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,” said Seng.