Texas Gov. Greg Abbott last week directed the Texas Water Development Board (TWDB) to compel major water users, including data centers, to comply with water use reporting requirements and to impose legal consequences for past and future failure to comply with state law.
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 governor also directed TWDB to partner with the Electric Reliability Council of Texas (ERCOT) on its audit of data centers to seek additional water use information.
“Data centers must share the duty to protect Texas water,” said Abbott. “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.”
TWDB is charged with developing a state water plan that meets the needs of Texans and cannot perform that task if it is denied detailed information on existing and anticipated water consumption.
The Texas Water Code requires recipients of a TWDB survey to complete and return it. A data center that fails to complete and return the survey commits an offense punishable as a crime. A data center that fails to timely complete and return the survey is ineligible for TCEQ permits, amendments, or renewals under Chapter 11 of the Texas Water Code. TWDB must enforce those remedies against noncompliant data centers, including referral to the appropriate County or District Attorney and notice to TCEQ for possible permit disqualification.
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On August 3, 2026, Governor Abbott directed the Public Utility Commission of Texas (PUCT) and ERCOT to conduct a comprehensive audit of all data centers that advance through ERCOT’s interconnection process. That audit requires detailed information on water consumption, sources of water supply, and implementation of water-efficient technologies. Any data center project that fails to complete the audit process must be denied interconnection.
TWDB must coordinate with the PUCT and ERCOT and partner with ERCOT to audit water consumption, sources of water supply, and implementation of water-efficient technologies. Failure to respond to that request will trigger TWDB’s independent enforcement authority. TWDB shall update the Office of the Governor by October 14, 2026, on the progress of its enforcement activities, with further updates thereafter, including when the audit is complete.
Read Abbott’s full letter to TWDB Chairwoman L’Oreal Stepney and Executive Administrator Bryan McMath here.
Source/s: Office of the Texas Governor; Texas Water Development Board
Tying the audit to interconnection is the part with teeth, and it is also the part that makes these buildings easier to see. We publish construction market intelligence, and the working rule on our side is that a building can be kept quiet but the things a building needs cannot: the land, the power, the water and the months of clearing and grading all move through processes that involve named companies doing visible work. So a reporting duty on water use does not just conserve water, it puts one more dated step in front of a project that otherwise shows up as a press release after the general contractor is already picked. That sequence is most of how early a data center build becomes visible in a market. The one thing I would watch is scope, because a rule written at the state level gets read at the site level, and a county with four separate campuses is not one project.