Texas governor wants to penalize data centers that fail to report water use

Texas Governor Greg Abbott asked the Texas Water Development Board (TWDB) on September 14, 2026, to take action on failures to respond to water-use surveys. The directive applies to major consumers that receive these surveys, including data centers, as Reuters reports, and calls for legal consequences for past and future violations.

A data center houses servers that support various digital services. AI is one of their possible uses. The TWDB, which is responsible for water planning and financing, collects reports from facilities to estimate their needs and plan infrastructure.

The surveys contribute to water demand projections for the next fifty years. If more operators submit complete responses, local governments and water utilities could plan their investments with a more accurate understanding of industrial water use.

This data collection has a low response rate. The Texas Tribune reports that 329 data centers were surveyed in 2025 and that nearly 30 % responded, citing TWDB records. The agency has been surveying data centers since 2020 and asks each year for their monthly water use.

The figure of 329 refers to the sites surveyed in 2025. It represents neither all of Texas's data centers nor their water consumption. The industrial form covering consumption during the 2025 calendar year, meanwhile, had a deadline of March 1, 2026. Missing reports alone do not prove either waste or a shortage.

The TWDB refers cases, prosecutors can bring charges

Responding to a survey received is already mandatory under Water Code Section 16.012(m). Failure to return a complete survey is a Class C offense. Missing the deadline also results in ineligibility for TWDB funding and certain water-related permits, as well as amendments or renewals to those permits under Chapter 11.

Abbott asks the TWDB to refer violations to the appropriate county or district attorneys. The agency collects the information and refers cases to these authorities, who can initiate prosecutions. The TWDB must also notify the Texas Commission on Environmental Quality (TCEQ), the environmental commission that issues the permits in question.

The directive therefore invokes existing provisions. It does not give the TWDB any authority to prosecute directly and does not provide for the automatic revocation of all authorizations for a site. The agency's official page states that ineligibility for permits ends once the survey is administratively complete.

Projects undergo a separate audit

The annual survey covers operating facilities and excludes sites still in the planning stage. On August 3, 2026, Abbott ordered PUCT and ERCOT to audit data center projects moving through the electricity grid connection process. PUCT is the Public Utility Commission of Texas, and ERCOT is the grid operator.

The audit requests, among other things, information on projected annual and peak water consumption, sources of supply and efficient cooling technologies. The August announcement provides for denying grid connections to projects that fail to meet the audit's requirements. Failure to respond to the annual survey does not, on its own, trigger a power cutoff.

By examining projects, the audit could supplement the information collected from facilities already in operation. Its ability to fill this information gap will depend on the information actually obtained.

Abbott expects an update by October 14

In his September 14 letter to the TWDB, Abbott requests a progress update by October 14, 2026, followed by further updates. This report must be submitted to the governor.