Governor Greg Abbott ordered Texas regulators to penalize data centers that withhold water-use information as the state expands its role in AI infrastructure. Texas paused new electrical connections for data centers while reviewing their power and water needs. The Texas Water Development Board was directed to "impose legal consequences," and operators who fail to return TWDB surveys risk denial of new or renewed environmental permits.
Texas Moves to Penalize Data Centers That Withhold Water-Use Information Amid AI Buildout
FILE PHOTO: The steel frame of data centers under construction during a tour of the OpenAI data center in Abilene, Texas, U.S., September 23, 2025. REUTERS/Shelby Tauber/Pool/File Photo
NEW YORK, Sept 14 (Reuters) — Texas Governor Greg Abbott has ordered state regulators to penalize data centers that fail to disclose detailed information about their water consumption, a step aimed at boosting transparency as the state expands as a global hub for artificial intelligence infrastructure.
The directive comes after Texas temporarily paused new connections for data centers to the state electrical grid while officials review the facilities' power and water demands and reassess oversight of the large server campuses now proliferating across the state.
Abbott told the Texas Water Development Board (TWDB) to "impose legal consequences" on data centers and other major water users that do not meet statutory water-use reporting obligations, according to a statement from the governor's office.
"Major water users, including data centers, appear to have committed civil and criminal violations through failure to provide TWDB with required information about water usage," the statement said.
The TWDB is surveying data-center operators to collect current and projected water-consumption figures. Facilities that fail to return the questionnaire by the deadline may be denied new or renewed environmental permits required to operate or expand their sites.
The move signals stronger regulatory scrutiny of resource-intensive facilities as Texas balances rapid technology-sector growth with concerns about electricity and water infrastructure. Operators and industry groups have previously raised concerns about permitting and supply constraints as data-center construction accelerates.
Reporting: Laila Kearney in New York. Editing: Franklin Paul.
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