AUSTIN, Texas — Texas Attorney General Ken Paxton has launched an investigation into hundreds of data center developments after companies in 18 counties failed to respond to a state survey seeking information about their water use.
Paxton announced the investigation Thursday as Texas officials face growing concerns over the amount of water and electricity data centers consume as the industry expands across the state.
The Texas Water Development Board requires water users in several industries, including municipal, industrial, power generation and mining operations, to provide information about groundwater and surface water use.
The Attorney General’s Office said the initial investigation covers data center developments in Harris, Montgomery, Travis, Dallas, Tarrant, Smith, Bexar, Tom Green, Potter, Randall, Lubbock, Midland, Ector, Wichita, Victoria, Brazos, Nueces and El Paso counties.
The TWDB has said fewer than 30% of data center companies responded to its mandatory water-use survey.
Paxton said his office will require data centers across Texas to provide updated and accurate information to the water development board.
“It is our responsibility to steward our state’s land well, and we cannot do that if companies are blatantly disregarding their legal obligations to Texas and to our citizens,” Paxton said. “We cannot sacrifice our resources, water, or energy supply, and I will continue to fight for our communities across this state.”
Texas has 335 operational data centers and at least 248 additional projects in planning or development, according to state figures cited in the report.
The lack of detailed information about data center water and power consumption has drawn scrutiny from state officials, researchers and residents.
University of Texas at Austin professor Vaibhav Bahadur said companies may hesitate to disclose water-use figures because cooling technology can provide a competitive advantage.
“It’s very difficult to get actual numbers from industry,” Bahadur said. “If an industry has an advanced cooling technology that cuts down their water use, they will want to use it as a competitive advantage and not really share it.”
A UT Austin study released in May found that data centers currently account for less than 0.5% of Texas’ statewide water consumption. The study estimated that continued industry growth could increase that share to 3% to 9% by 2040.
Bahadur said the statewide percentage could remain lower under more water-efficient practices, but he noted that data center water demand can create significant challenges for individual communities.
“Every bit of surface water in Texas is already allocated,” Bahadur said. “It’s 1 or 2% of statewide water consumption, but even 1 or 2% is quite a lot if you look at it locally.”
Data centers also have an indirect water footprint through the electricity they consume. Bahadur said power plants that rely on natural gas, coal or nuclear energy can require water, while wind and solar generation do not consume water in the same way.
The Brookings Institution estimates that a typical data center uses about 300,000 gallons of water each day, roughly the amount consumed from about 1,000 homes. Larger facilities can use as much as 5 million gallons daily, according to the think tank.
Bahadur said most modern data centers use water seasonally, particularly from May through October, while some older facilities continue to use water throughout the year.
Data center developers have pushed back against concerns over water consumption, saying newer facilities can use alternative cooling liquids or recycle water to reduce demand.
Texas Gov. Greg Abbott also ordered the Texas Commission on Environmental Quality to pause new data center permits while the Electric Reliability Council of Texas and the TWDB complete an audit of data center projects.
Abbott said TCEQ should consider the audit’s findings when reviewing future permit applications.
The state’s water planning efforts also highlight the broader challenge. The 2027 Texas Water Plan calls for $174 billion in water supply projects and management strategies over the next 50 years to address potential shortages.
Bahadur said his UT Austin team is developing publicly accessible tools that could help communities estimate local water demand from data centers. He said the project uses artificial intelligence to improve the models and make the information available to the public.
The investigation comes as Paxton campaigns for the Republican nomination for U.S. Senate and prepares to face Democratic state Rep. James Talarico in the fall.
Talarico criticized Paxton’s record on data center incentives and accused him of changing his position on the industry ahead of the election.
“Ken Paxton gave data center companies billions in tax handouts that created the problem we have today,” Talarico said in a statement Thursday. He also criticized Paxton over campaign contributions from data center interests.
Paxton has accused Talarico’s campaign of accepting money from data center-affiliated donors.
Paxton voted in 2013, while serving as a state senator, to create a sales tax exemption for data centers. The exemption cost an estimated $14.6 million in 2014 and could reach $3.3 billion over the next two years, according to state estimates.
